Owing to the present global crisis, namely COVID19, when you are trying to deal with the economic meltdown and saving the business from its impact, it becomes imperative for you to manage the cash flow in the business. Now, if you are a small business owner or a retailer, it is surely a trying time for your business. As your capital money is limited and you are mostly dependent on the money from the clients and customers, it is obvious that your business is going to face a heavy blow.
Now, most of the states and countries are under lockdown. As a result, either the businesses are closed which is true in the cases of retailers, or the companies are running on limited resources. Now, no matter which group you fall in, it is obvious that you are already feeling the impact of the global economic recession. In a situation like this, even though it is challenging, these following points will help you keep the cash flow in your organization under control. Take a look.
The first and foremost thing that you must do is check your capacity. You must not get overwhelmed by the situation. However, take a practical approach. Check your financial capacity within the company. While doing so, get the help of your accountants as well as collection agency services. Your in-house staff will tell you how much money you already have in your account. The collection agency will be able to tell you how much debt and credit they can recover on your behalf.
Depending on your capacity, you have to take steps to control the production. When you are trying to manage the cash flow, in the outside world, your outlets are closed. Deliveries are stopped. So, there is hardly any point to keep the production on in full swing. Rather, controlling production will mean that you have more cash in hand as you can stop investing in the raw material.
Seek Government Aid
In many states and countries, owing to such a situation, the government and authorities have introduced different schemes that can help you. If you have any loan for commercial purposes and you are being unable to repay, look for the aid in the sector that can buy you some time and offer you some relaxation. For the daily wages of your employees, you can also do the same. While doing so, make sure you are maintaining all the documentations perfectly.
Turn the Invoices in Cash
Look into the ledger. Find out how much payment is still pending and how much credit you need to recover. Get help from the debt collection agencies in your city to deal with the invoices and get the credit back. If possible, get into a discussion with your debtors virtually and find out if there is any term of settlement that can help you both. Make sure you are conveying the message that though you need the money yet you are willing to continue the business association with them. Offer your customers online and digital payment methods so that your payment doesn’t get stalled due to the fact that you cannot meet them or they cannot send their officials with the check.
Keep the Communication Open
It is necessary that you keep the door of communication open. Talk to clients and the debtors who are not being able to pay due to the economic meltdown and their own financial crisis. Tell them that you genuinely understand their issues. Offer flexible terms for payment. Communicate with your suppliers and distributors too. When the crisis is over, production will have to go on full swing and perhaps at double the speed. So, make sure you don’t face any backlog then.
So, now as you know how you can take care of cash flow in the company with the help of your staff as well as collection agency services, what are you waiting for? Take the necessary steps today.