The most important way to be prepared for an unexpected event is simply the awareness that it could happen. When positioned against the ultimate goal of staying in business (and indeed thriving!), you’ll see which expenses are a “must” and which are a “nice to have”. It is less about cutting corners and more about making sure your business is spending intelligently. This is an important exercise to do, especially if you start to look at your overall cash flow and marginal cash flow as I described above. Take the time to evaluate your expenses on a quarterly basis. Also remember to ask for payment holidays if required from your lenders.Ĥ.
You’ll have to pay sooner, but it may lead to a smaller payment. If they aren’t, ask if they have an early payment discount. Also, vendors are usually willing to extend payment terms from net30 to net60/90 to loyal customers. Given the current circumstances, many landlords are giving temporary relief on leases and adding additional time to the end of terms. If your cash flow is struggling, look into renegotiating or extending terms with your vendors. The best teams will always have the C-Suite working together, they will all compliment each other and be able to have intervention strategies as and when they are required - this will also allow for bold decision making.ģ. The CEO, COO, and CFO need to work in tandem－there should be no surprises. And when additional funds or headcount is needed, the CFO is blindsided and unprepared for the new expense. It is not uncommon for the CEO and COO of an organization to work with the product or engineering team on a project without informing the CFO.
Once you have a CFO in place, it’s essential the entire C-suite is on the same page. Particularly someone that understands the ins and outs of business and finance strategy and will be able to manage the cash flow.Ģ. It is critical to have someone focused entirely on your business’ financials and the overall financial health of your company. If you can not afford a full-time CFO, use a freelance or contract CFO. In my view it is not an expense but a key investment. If your company does not have a CFO or a financial director, get one ASAP. Here are four ways companies can start to better manage their cash flow.ġ. A robust cash flow is important but will not happen overnight.
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