So it has now been two months since our world changed. We would like to think that our lives will return to normal and that business will return to pre-virus levels. There does appear to be some evidence that this will happen, but we know it will take time.
Unfortunately, we are already technically in recession. Recession isn’t a lack of money (there is now more money in the economy than ever before), it is the lack of money flow - the rate and speed that money is spent.
The inevitable result is that cash becomes precious. Cash is the lifeblood of every business - without it you can't survive.
Here is a list of tactics that you may experience or wish to employ to preserve your cash - obviously many of them are very dubious and negatively impact other business, so I can't condone them.
Use past relationship/trust Swap assets for cash Keep communication going Have a good gatekeeper Pay by cheque Increase terms – 30-60/60-90 days Discuss pipeline future business Blame a new accounting system Issue contra charges Claim Jury service Require two signatures/authorisation Use invoice debt Say you're on holiday Pay invoices out of order - it really confuses accounts Invoice queries – eg. quality, breakdown Say the invoice has gone missing Pay a bit at a time Use factoring Come to agreement with the state – HMRC, VAT All of the above are ultimately just stalling tactics. There are only three things that you can do to really save money:
Make it more efficient Make it more effective Stop doing it Here is an example of an exercise that you can carry out:
What could you put in place and do?
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