Companies reflect on importance of business cashflow
With businesses struggling financially during COVID-19, many were reliant on two weeks to two months of cashflow to get them through.
Even with Government stimulus packages that included assistance and deferral of repayments to banks and financiers, some have extended their cashflow timeframes, but some financial advisers say this a false security.
Power Tynan CEO, Amanda Kenafake, said these packages provide a level of protection, but only for a short period of time.
“The concern is, this provides a bubble in time where you have protection, but what does your cashflow look like in three, six or even twelve months?”
“I have always been an advocate of doing cashflows and three-way forecasts to not only understand where your business is at today, but where it is going.”
“This enables scenario planning and an understanding if you pull certain levers, what that does to the cashflow of your business,” said Ms Kenafake.
Ray White Commercial Toowoomba Sales and Leasing Agent, Peter Marks, said the pandemic has put a spotlight on the vital importance for having a plan of action.
“In my previous career as a Financial Planner, my goal wasn’t to assist people to plan for one or two years, it was for ten, twenty or thirty years, and now, decisions need to be made regardless of whether you are leasing, selling or purchasing.”
“We must think of the big picture and remember that the population growth and our relatively strong economy will ensure today’s portfolios will keep increasing in value over the long term,” said Mr Marks.
Director of Clifford Gouldson Lawyers, Ben Gouldson, said the usual avenues to recover cash may not be as readily available and businesses need to be aware of what they can do now but also in the future.
“This means working creatively, focusing on customer relationships, and being proactive to keep cash moving will be more important than ever.”
“Businesses should take full advantage of Government or bank support to find a way to enhance relationships with clients and the community, win market share in the downturn, to capitalise on the recovery on the other side of COVID-19,” said Mr Gouldson.
Robertson Scannell Director, Mark Mahony, said business planning is critical to map a pathway for achieving objectives with the current environment forcing businesses to consider a change to the usual methods.
“Understanding the now and where business is going is the easy part - the how is most important.”
“Developing real action lists help ensure that a business will survive, focusing on the things that matter and that a business owner can control.”
“Businesses need to create a plan for the months ahead, adapting to change and mapping new visions through strategic planning advice,” said Mr Mahony.
Toowoomba and Surat Basin Enterprise (TSBE) has been working with their professional service members to help provide advice and assistance to businesses where possible.
TSBE CEO, Ali Davenport said, “the diversity of our economy, paired with the long term vision for local businesses is what will assist our region been known as a safe and confident place to invest and grow.”