Why is cash flow a problem in a crisis? What can you do to minimize the effect of cash flow disruptions?

Sustaining a smooth and stable cash flow to keep your business viable during an unprecedented economic shutdown will be a hard struggle for many small businesses. The global pandemic has upended revenue forecasts, toppled growth projections, and decelerated cash flows to a trickle. Manage cash flows during a period of crisis through strategies such as: 1. Understand where you are – analyze your current cash flow standing, highlight the issues you are facing now and their impacts on future cash flows. 2. Identify the possible course of action – manage and expedite receivables, update your payable strategy to extend the payable period, squeeze timeline between input costs and sales, evaluate your cost structures. 3. Conserve and stabilize your cash resources. 4. Searching and evaluating current and future market opportunities to survive during an unpredicted crisis and the post-Covid-19 business world. 5. Do scenario planning to ensure your own financing remains viable. 6. Consider alternate or non-traditional revenue streams. A more diversified revenue mix will keep your small business adaptable to different business environments.

Salman Rundhawa
Salman Rundhawa
Salman Rundhawa is the founder of Filing Taxes. Salman provides valuable tax planning, accounting, and income tax preparation services in Toronto, Mississauga, Oakville, and Hamilton.

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