Your UHY Staffing Industry professional team realizes that COVID-19 is already having a negative impact on many of our clients. Organizations are in the position of having to analyze cash reserves as they are faced with the decision of how long or if they can maintain fixed overhead payroll or other pertinent operating expenses. Lost revenues from closed manufacturing operations and other industries that have gone remote are playing havoc on a great number of organizations.
Although it is not possible to reliably estimate the length or severity of the situation, we are advising our clients to evaluate the need for proactive steps that may help ease cashflow issues. Below are some potential cash/revenue infusions to consider as you begin to assess if your cash reserves will outlast the return to normalcy.
- Establish and prepare a contingency plan that allows the company’s adjusted revenue, variable and fixed costs under two or three scenarios
Prepare a 13 week cash flow projection of your essential cash in and cash outs. This will allow for highlighting the critical cash needs and be able to proactively make decisions today to help position for tomorrow.
- Review your current customers and determine if anyone is over 40% of the business. Work to see how this effects the overall revenue and cash flow if they were to drop to 20% or lower.
- Verify and complete all daily time entry by your staff and be consistent and timely in getting your billing out
- Consider changing your billing to twice a week in an effort to get the bills in on a timely basis
- Reach out to your critical vendors now for extended terms such as facility rent, utility companies, software providers, and other critical suppliers that could shutter your business
- Analyzing and staying on your Accounts Receivable will be crucial as many payroll funders and lenders are going to want their portion of the payments.
- The SBA has already announced disaster loans to small business. Review the requirements and be prepared to apply as soon as your state has been approved as a disaster area.
- Reach out to your lenders and/or payroll funders to verify and potentially increase your lines of credit or borrowing limits.
We are here for you and we will get through this together.