Managing cashflow as the covid crisis eases
For a lot of businesses, cash flow is very seasonal. You find a way through the lean months of the year in the knowledge that things will improve, and you capitalise on the stronger earnings when you get them.
That’s exactly how businesses should be approaching the current economic climate.
Earnings projections that you may have had back in January can be thrown out the window for most businesses, and as the government stimulus starts to roll in it is about making the most of your current cashflow, and being well prepared to come out of this well set for a post-COVID world.
But you need to be realistic as well. Don’t expect the same earnings that you got last year, and don’t expect that things will be back to normal for some time.
We already know that the government stimulus is designed to help out for a six-month period, so we know there will be more change coming in October when those JobKeeper payments cease.
The key to survival will be patience. Use this time to get back on track, and come October be patient with your staff, and importantly be patient with your clients and customers.
Many of them will have been affected and will be managing a new economic situation of their own when the stimulus measures cease, so having flexible payment options and being understanding will be important.
To that end, communication will be key. Be ready to work with your clients to help each other and understand that everyone is in a similar boat when it comes to navigating this unprecedented crisis.
What I would like to see from the government would be for the current stimulus measures to run their full course, and then look at means testing businesses again to see which ones may need some ongoing support from October onwards.
For example, a builder who has jobs allocated to this financial year may find themselves with zero work come July and yet no way of accessing JobKeeper. That’s a huge part of the Australian economy that deserves the same help that is being offered currently.
My message to ScoMo is let this round of stimulus run its course, but don’t discount a further round of measures later in the year to make sure no one is left behind.