31/01/2021 by MNV Associates
Business Recovery Tips
None of us have seen something quite like the present situation. Governments, companies, and people all manage what is entirely unchartered waters. Although that may make it very difficult to do business, there have been things you can do while waiting for a return to normality.
Know the estimates for cash flow
Creating a cash flow plan is just one of those aspects for when the furlough scheme ends.Make sure that when the company returns from recovery mode, you have a decent understanding about the amount of revenue you can expect. Sit down and figure out exactly what the company's outgoings will be over that crucial time as well.
The ability to anticipate challenges with cash flow gives you the capacity to get in front of them. For company recovery, forecasting would see you better positioned. Identify any possible pinch points and put in place measures to mitigate the effect. Being mindful of something that lies ahead is an asset in these unpredictable times, even if that thing is a snag.
What financing is required for cash flow management?
Take into account all the ways you could fix any possible cash flow budget problems once you've worked out what lies ahead. There are a variety of government initiatives that you should also accept on top of the current available lines of credit, such as overdrafts, credit cards and bank loans.
From bounce back loans to cost relief; familiarize yourself with what's available for your particular conditions. Build a working understanding of what you will need to apply for any scheme or loan that applies to you and do so before you need it.
Assume clients to pay you slower than before
You should expect every rebuild to be a little slow with so many companies on hold. The papers can make reading frustrating at the moment. Estimates of how long it will take for the economic recovery to start at three years and go up. Aside from forecasts, it would be helpful to bear in mind that things are not going to pick back up immediately.
It's fair to see this as just one more challenge to conquer. It is also accurate, though, to suggest that the majority of us are going to be in that boat. In attempting to regain healthy cash flow, the organization won't be alone. It's extremely likely that your clients will still be struggling with that.
Do not build predictions on consumer payment time frames prior to the pandemic while you're forecasting. On the side of caution, enable some contingency and mistake. That will lead in less unexpected events that are unwanted.
Note, difficulties that occur when consumers are reluctant to pay are not unmanageable. If overdue payments start to create issues with real cash flow, one alternative to consider is invoice financing. That's a kind of credit that's not going to be familiar to us all. The financing of invoices is a relatively simple and inexpensive way of dealing with slow payers. It's a form of debtor financing where you borrow for a small fee on the value of an unpaid invoice.
VAT and other taxes you still need to pay
There is still the unpredictable aspect of a global pandemic, the unpredictability surrounding how your organization will bounce back. Then the utter assurance of taxes is there. The taxman may very well be self-isolating, but it just means he's going nowhere, and in any company, turnaround plan you put together, tax payments remain something important.
In 2021, the 31st March VAT deadline may well be the last ever aspect you would like to think about right away, and you can be justified for that. Planning for your tax obligations, however, can only stand you in good stead, and there are arrangements to assist COVID-19-affected firms. HMRC has also expanded its Time to Pay service, and for the next financial year, the corporate tax rate has been set at 19%.
MNV Associates here to help business owners on the path to recovery
A bumpy ride can prove to be the road ahead. There will be days for several company owners and workers where it feels like it's an ongoing struggle. Your path back to business recovery, however, is feasible. A perfect way to start planning for the day you start traveling again is the proper scheduling. A little bit of help along the way can also make you drive more efficiently and quicker. Expert guidance will help ensure that you use it in the best possible way.
MNV Associates offers a wide variety of organizations with specialized financial forecasting and modeling services. Our ideology is based on transparent and fair contact and the arrangement of a monthly fixed charge. Although forecasting is necessary during the COVID-19 pandemic, it is extremely beneficial all the time.
Our technical teams will assist you in setting up the right reporting systems and tools for your organization and advise you how to make the best use of it. Precise management forecasting not only saves the cost and recognizes potential risks, but also makes lenders and investors a better option for your organization. For further information or for assistance with your recovery, please contact us or a member of our team in our Dubai office.