Is your liquidity declining drastically? Is the turnover collapsing? What about your credit rating? Are you threatened with insolvency?
Do you still have an overview of your payment obligations and incoming payments in the face of a suddenly changing situation? How long is your company’s liquidity still secure?
The times when you could derive your financial requirements solely from the business figures are over. An imprecise liquidity situation now has fatal consequences for your company.
Especially in times of crisis you need an up-to-date and valid liquidity planning
Management decisions and thus the future of your company and your employees currently depend on your liquidity planning. You also need up-to-date and valid liquidity planning for financing. This is prepared as follows:
- You establish a cash status and compile the liquid funds.
- You compare your income with your expenses according to due dates.
- You examine what influence the business development has on your turnover and thus your income and expenditure. (you plan with different scenarios).
- You separate payment obligations into regular and occasional payments.
- You check whether payment obligations can be reduced or postponed.
- You check whether the deferral of taxes and social security contributions will bring additional liquidity and submit corresponding applications.
They calculate the balance (bank plus income minus expenditure) per week, preferably per day.
The aim is a solid liquidity situation, i.e. the coverage of your obligations by your own funds and income.
In the event of a shortfall in cover, you contact your bank or find other sources of financing (emergency aid from state and federal funds).
The most difficult task in planning is to keep it up to date. Information that affects liquidity, such as payment deferrals or new financing, must be kept up-to-date. On the basis of a valid liquidity plan, you make decisions on the continuation of your business operations.
You are not alone
Get CFO Consult at your side for crisis management. I will help you to develop scenarios and measures to secure liquidity or to enforce your individual concerns with suppliers, banks or authorities. Trust in my experience in crisis management!
Hence my offer for a free initial consultation on liquidity protection for April 2020.