Cashflow Advice 

In any business cash is king and in particular, in a crisis situation it is very important that the cash flow of the business is given top priority. Each of the various headings that we deal with separately is dealt with within the context of having a positive impact on the businesses’ cash flow. Provided the business can reduce the levels of outflows by negotiations and discussions with its key suppliers and at the same time maintain and maximise the cash inflows at the highest possible levels, the business should be able to continue to function.  It is important to manage the business in such a way that when the crisis has abated, the business is in a good position to resume trading and to recover some lost opportunities, if possible.

 

Depending on the industry sector there may be an almost total drop in turnover or the drop may be partial or gradual.  If there is a complete drop in sales, for most business this will also mean a complete elimination of purchases.  The next biggest cost for most industries is their staff or employee cost.  We will discuss strategies to mitigate the level of costs relating to staff and employees, while still seeking to preserve the integrity of the workforce, and to provide staff with the maximum possible level of income so that they can personally deal with the economic implications of the COVID-19 crisis. 

 

An immediate exercise should be done to eliminate all non-essential costs and where possible to cancel contracts for costs, that are not fundamental to the continued survival of the business. It should be noted that no decision should be taken to cut insurance payments unless a full review has been undertaken of the implications of the same. We will separately look at insurance and the potential for cover to be available to the business for business interruption.

 

The Revenue Commissioners and various banks have already indicated their willingness to work with businesses in order to alleviate the burden on cash flow from the current crisis and the common message is that communication and early approaches are the correct way to deal with this matter so that any cessation of payments is done on an agreed basis.

 

Most businesses will already be receiving calls from customers seeking to defer their payments and policy needs to be adopted that is fair and flexible but also doesn’t compromise the business in terms of its future ability to collect payments once the crisis has abated.

 

The link to the Revenue Guidance on measures adopted to facilitate business during the crisis is set out here.

https://www.revenue.ie/en/corporate/communications/covid19/revenue-services.aspx

 

The main page of the Banking and Payment Federation Ireland contains links to each of the main retail lenders operating in the country. The link to the advice page is here.

https://www.bpfi.ie/key-topics/banking-payments-industry-covid-19-support-faqs/

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Harmony Court, Harmony Row, Dublin 2, Ireland.

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Tel: +353 1 6311200 

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