Build cash flow projections if you don’t already have them. Basic weekly projections of cash-in and cash-out can help you spot shortages well in advance.
Always know how many months of cash you have remaining. Some teams are calling this their "Time To Death" - its harsh but keeps people focused on the number (from Metronome United Coaches discussion - 3/17/2020)
If you are profitable, you can have a monthly cash flow forecast. If you are not profitable, better to have a weekly cash flow forecast (3 week rolling at a minimum). If things are really bad, you need a daily cash flow forecast.
Metronome Coach Beth Fisher shared the following Cash Forecasting practices (Metronome Growth Coaches webinar 3/17/2020):
Weekly cash forecast - 3 months out
A/R, A/P subledgers - P/R
When can you collect.
Keep it super simple - high level.
Get your cash balance every day from bank - what's cleared?
Reconcile to your bank account weekly.
Manage your receivables actively. Companies are likely to slow their payment processes down to conserve cash. Keep in touch with clients about their payable plans.
Consider maxing out your lines-of-credit and sit on the cash. Banks may pair back credit lines that aren’t being used to reduce their risk. Use your line if you are concerned about getting it cut.
Know your loan covenants and make sure you are and will be keeping them above your bank’s requirements. You don’t want your loan pulled unexpectedly.
Keep communicating with your bank and keep your relationships with your loan officer healthy. Give them advance warnings on possible trouble spots so they are more likely to work with you. Banks don’t like surprises. If you are on your numbers and keep them in the loop well in advance on future trouble, they are more likely to work with you in an adverse situation.
Put expansion plans on hold and conserve cash.
Review your liabilities / creditors
Confront the things that are scaring you head on. Initiate conversations with each to open up a line of communication and a plan to get through the crisis together.
Negotiate grace periods. Everyone knows there's a big problems out there - banks don't want to own your collateral - they seem so far willing to work with companies.
Be vulnerable - talk to them and share your projections and find out what's possible for you. Have the courage to tell them how bad it is for you.
Ask for the moon - ask for anything - go now before you are desperate
Demand will get really high - be the first before others grab up the best opportunities
Quicker you react - better you will end up
Vendors - could give 90-120 days
This will give you the liquidity you need to survive.
(from GGOB Webinar with Jack Stack on 3/20/2020)
Get your cash flow statements up in your virtual situation room
Show people where things are
Get their thinking about course corrections to make things better
(from GGOB Webinar with Jack Stack on 3/20/2020)
Credit Card Companies
I am hearing reports of credit card companies not only backing off their policies of interest charges and late fees, but actually offering to help their clients thru the crisis. Contact your credit card providers and ask them what their policies have become for the next 60-90 days.
Lines of Credit
Having a line of credit doesn't help you if you make bad cash decisions - keep the cash in your account for as long as you can. Save it for when you really need it. Cutting spending is key. (from TruMethods Winner Circle webinar - 3/20/2020).
Ami Kassar of Multifunding did webinars on Managing Your Cash Flow During the Corona Virus Crisis - I haven't watched it yet - if you have, let me know whether it's helpful. The link is: Ami Kassar - SBA Economic Injury Disaster Loans (EIDL)