How Will COVID-19 Impact Your Cash Flow?
Author: Kristen Foss, CPA, ABV, Manager
Due to the unprecedented challenges and uncertainty caused by the coronavirus (COVID-19), we are aware business owners and organizational leaders are facing hard decisions and extraordinary stress. These challenges and uncertainties will have significant impact on your business’ cash flow and operations.
During this time of emergency and global uncertainty, the ability of an organization to manage cash and cash flows becomes a critical operation that impacts organizational continuity and success. Strategies focused on cash flow management are critical to risk assessment and near-term decision making as well as provide clear understanding of the long-term impact on the strength of the organization’s balance sheet.
Below are five action steps organizational leaders can do now to prepare for the foreseeable economic impact of the coronavirus (COVID-19).
1. Identify new expenses incurred to respond to the coronavirus (COVID-19).
It is of critical importance to properly and completely identify these new or additional expenses and properly measure their significance.
Aside from strategy, properly identifying these additional costs may be useful down the road for potential Federal, state, and local relief and assistance programs in the future.
2. Identify expenses that can be cut or deferred.
This is essential to cash flow management to save on expenses that can be deferred, to manage the unforeseen or extraordinary expenses that cannot be avoided at this time of emergency.
3. Gauge lost revenue.
Computing lost revenue for both the short and long-term to facilitate accurate planning.
4. Assess balance sheet health.
Assessing current balance sheet health as well as determining the ongoing impact on the balance sheet for informed decision-making.
5. Build a strategy.
A realistic and accurate financial picture is essential for strategy determination and decision-making. Cash reserves and access to cash is essential during these unprecedented times.
How Brady Martz Can Help
Brady Martz has a team of professionals that are experts in cash flow analysis. We can help you navigate the steps and assist in determining each step’s impact on cash flows.
We are here to help you in this unprecedented time by providing you the essential understanding to handle the economic impact of these trying times. Please contact any of our following team members to discuss the challenges you are facing. We are ready to assist you.
For emergency financial assistance please click here to see guidance from the North Dakota Department of Commerce.