The focus of most businesses is now on protecting employees, understanding the risks to their business, and managing the supply chain disruptions caused by the efforts to contain the spread of COVID-19.

The full impact of this epidemic on businesses and supply chains is still unknown. However, one thing is certain: this event will have global economic and financial ramifications that will be felt throughout global supply chains, from raw materials to finished products.

  •  Deloitte Consulting offer the following practices and strategies for consideration:

  • Ensure you have a robust framework for managing supply chain risk
  • Ensure your own financing remains viable
  • Focus on the cash-to-cash conversion cycle
  • Think like a CFO, across the organization
  • Revisit your variable costs
  • Revisit capital investment plans
  • Focus on inventory management
  • Extend payables, intelligently
  • Manage and expedite recievables
  • Consider alternative supply chain financing options
  • Audit payables and recievables transactions 
  • Understand your business interruption insurance
  • Consider alternative or non-traditional revenue streams
  • Convert fixed to variable costs, where possible
  • Think beyond your four walls

What’s next: Recovering and returning to normal business operations

Cash flow management needs to be an integral element of a company’s overall COVID-19 risk assessment and action planning in the near term. Even for companies that have not yet been adversely affected, we recommend management teams with concerns about COVID-19 actively evaluate their cash flow requirements, develop appropriate actions under various scenarios, and assess potential risks in and to their customer base and supplier network.

Enhanced working capital and cash flow forecasting 

Deloitte has developed an approach to cash flow forecasting that combines advanced analytics capabilities with hybrid forecasting methodologies to establish the foundation for more precise forecasts that integrate and reconcile across financial statements. 

Benefits of Payment
and Working Capital
Management Strategies
Integrated with BSM

In the current environment with many businesses
operating remotely, suppliers are more likely to adopt
digital programs.
This is an ideal time to put working capital and
payments strategies into action.
The solution to breaking through long-standing siloed approaches to payments, AP, procurement,
and working capital optimization is deploying a comprehensive Business Spend Management (BSM)
strategy across the company complemented by a BSM platform that connects all processes in one
place. By integrating all aspects of spend and buy-side cash flow, from procurement to payments
to working capital optimization, BSM takes a holistic approach to how companies source, procure,
expense, invoice, and pay for the goods and services that make their business run.
Modern BSM platforms offer seamless integrations not only with existing ERP systems but also with
suppliers and banking partners. With these groups working together in one system, there is great
potential to free up cash while supporting struggling suppliers.
Business Spend Management
• Bottom-Line Impact: Improve Profitability from Use of EarlyPayment Discounts
• Improve Cash Flow: Enhance Liquidity by Extending DPO
• Reduce Supply Chain Risk: Combat Risk with Visibility into
Supplier Health and Effective Programs for Helping Suppliers
• Increase Efficiency and Savings: Stop Chronic Inefficiency of
Transactional Payments Processing