With the health crisis, business leaders have had to deal with plate tectonics. All aspects of the company have been brutally and 360° impacted: level of activity, team management, customer relations, reduction of social interactions, supplier relations, etc.
To deal with this, the French public authorities have taken strong measures to support our businesses. Over the past two years, cash management has been vital. It was about businesses staying alive.
Know how to assess actual availability
Today, surveys on the subject show that availability is very important for many companies. They are often inflated by public aid and state-guaranteed loans (PGE). But in the coming months, and with the end of whatever the cost, these aids will have to be reimbursed. And availability management will become even more important.
Adopt the right processes and the right tools
Most of the time, SMEs and ETIs have to deal with problems (almost) identical to those of large groups. They often have several banks, several bank accounts, payment runs, foreign currency payments, fraud risks, working capital to manage…
To be equipped to get through the next few months, SMEs and ETIs will have to equip themselves with the following processes and tools:
• Centralize all matters affecting the company’s cash on a single person, responsible for cash management;
• Set up precise, frequent and recurring monitoring of cash flow, making it possible to know in real time all the company’s availabilities;
• Set up CT cash forecasts (13 weeks) to anticipate any tensions and be able to take corrective action;
• Ensure efficient customer billing and precise and frequent monitoring of customer receipts, to track and relaunch late payments;
• Effectively organize supplier payments with the application of deadlines authorized by the LME, schedule payment runs around two or three deadlines in the month, and with secure means of payment (stopping of cash and checks).
Anticipating to structure and secure the company
This list is not exhaustive and will vary from company to company. Setting up these processes and tools will not happen overnight and will take several months. The sooner they start this long-distance race, the sooner companies will be structured and secure.
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