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.
- 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.
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
Integrated with BSM
In the current environment with many businesses
operating remotely, suppliers are more likely to adopt
This is an ideal time to put working capital and
payments strategies into action.