Last Updated 13 May 2020

In uncertain times, cash flow becomes extremely important, businesses need to develop a cash management plan as part of their business risk and continuity strategy. As part of businesses plan they must address cash preservation, cash management and utilise technology.

Cash Preservation

• Manage supply chain risk; communication with buyers/suppliers, negotiate payment plans and keep an open communication channel
• Financing; assess lines of credit available to you, utilise SME Guarantee Scheme.
• Rent; negotiate rent reductions
• Reduce variable costs; hold off on non-essential purchased and review overheads such as advertising
• Take advantage of Government support such as JobKeeper payment scheme

Cash Management

• Inventory Management; purchase safety stock for security against supply chain disruptions, reduce perishable goods inventories and find a balance between buffer inventory & cash flow.
• Manage receivables; customer may delay payments, improve collection process and practice timely & accurate invoicing.
• Internal audit; pay the right amount for purchased, utilise discounts and put in place long term policies to reduce wastage.
• Convert fixed to variable costs
• Cash flow forecasting; update forecasts on a weekly or monthly basis.

Technology

Utilising forecasting tools such as Float can produce real time view of your numbers with the click of a button. Float can help a business with a variety of functions; forecasts, reconciliation, managing invoices and bills, creating budgets and planning for different scenarios.

ABJ Solutions highly recommend the adoption of Float into your business, especially during these challenging times. At ABJ Solutions, we are experts on float and are happy to get you started.

Refer to ABJ Solutions Blog