Managing Cash Flow In Uncertain Times

In your prairie-based company, how are you managing cash flow through this trade war?

If your supply costs are increasing and you’re managing price increases to customers, cash inflows and outflows may become mismatched, making cash flow less predictable.

There are a number of tactics companies can use to better manage cash flow through this period, and beyond.

Ask your accounting and finance lead to prepare a weekly cash flow report, showing:

• your current total cash
• the number of weeks of cash reserve you have on hand
• expected payables and receivables over the next 2 to 4 weeks
• and any receivables that are at risk. 

In some faster-moving, highly transactional industries, where the cash position can change quickly, daily cash flow reports may be needed.

Pre-emptively identify cost reduction opportunities, and execute to get those savings. Even small amounts can add up to a large saving if there are a number of them. 

However, be careful not to “sell the furniture”, as some say. Cost-cutting should be done to identify and eliminate unnecessary costs, that are often overlooked during prosperous times. It’s not meant to cut costs that are essential to doing business. Maintaining a level of stability in your facilities, systems, infrastructure, staff and advisors is critical to navigating a trade war and potential economic recession.

Measure your cash conversion cycle, that is, the number of days from a dollar being invested in marketing to a dollar being deposited in the bank. And identify ways to speed up that cycle. 

This includes rethinking your internal processes, reducing mistakes or adjusting your business model, in terms of finding ways to get paid earlier and pay suppliers and vendors later, so you have more cash on hand for longer.

Identify other sources of cash to access in the event you have a cash crunch. Can you negotiate with large creditors or vendors now to preserve cash? Can you get access to more cash if you need it? Can you access government grants or special lending programs?

For some companies, cash flow will be a significant risk through this trade war. Mastering some basic cash flow disciplines can serve them well now, and into the future.


For other ways to navigate these challenging times with confidence, get the free complete Trade-War Success Guide for Small to Mid-Size Companies below.

Access Your Trade War Success Guide

If you are a prairie CEO who wants to grow a thriving company through these turbulent times, more quickly, more easily and with less stress and headache, please contact me here.

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