To say the least, the Covid-19 crisis has had a significant impact on our nation’s economy. As a result, businesses around our country and around the world have had to make adjustments to the way they earn revenue and maintain a steady cash flow. Fortunately, there are steps you can take – regardless of the type of business you own – that can help you strengthen and maintain your cash flow as we navigate towards the end of 2020 and into 2021.
Projections are your friend
During this time of uncertainty, you should frequently be running projections and cash flows in order to stay on top of any changes that might occur between now and year-end. By running both projections and cash flows on a monthly basis (at a minimum!), you can have a better understanding of not only what you need your revenue to be, but how you can make adjustments as situations continue to change due to the Covid-19 crisis. During this time, I have been monitoring my cash flow on a weekly basis and I project it out 13 weeks at a time. Doing this actually helps lower my stress level because I know exactly what is going on and there is no guessing. For me, the more knowledge I have (about any situation), the better equipped I feel to tackle anything head on!
Stay on top of receivables
When the economy is doing well, we all have a tendency to be more relaxed about our receivables. As we all navigate the effects of Covid-19, all companies have a chance of being affected. Additionally, your own customers may be in crisis mode when it comes to their financials and may want to delay their payments to your company. To help avoid this, stay accurate and timely with your invoicing, keep track of customer specific payment performance and keep the lines of communication open with your customers. They will appreciate it and so will you.
Think creatively about revenue streams
As we navigate our new normal you may find that your current revenue streams are adversely affected. If this is the case, try thinking outside of the box on ways to keep your revenue rolling in. For example, if you sold a product overseas, try to think about how you may be able to market that product domestically. Whatever your situation may be, thinking creatively about how to remedy it may go further than you think.
Don’t hesitate to ask for help
As we all navigate through the Covid-19 crisis, there are many challenges and regulations to consider. Even if you have not sought outside help before, now might be a good time to consider having an outside team of experts. There is much to sort through when it comes to the support available to businesses. Accounting, tax, legal and other professionals have the tools and knowledge to help you safely navigate to the other side of this crisis without hopefully going into a financial rabbit hole.