How to Protect Your SME Cash Flow During COVID-19
Due to the quickly-changing, uncertain circumstances created by the COVID-19 outbreak, the majority of U.K. businesses continue to fall victim to an economic shutdown. As travel bans and restrictions remain in place, your business may be in danger of closing shop if you can’t maintain decent cash flow. To keep operations running smoothly while prioritising the safety of your workers is a challenge, but working closely with your accountancy services can ensure enough cash flow to keep your business afloat. Here’s how you can get started.
How to Protect Your SME Cash Flow During COVID-19
- Provide Virtual Services
Due to lockdown restrictions and social distancing guidelines, most non-essential businesses have been forced to remain closed. Though in the best interest of public health, a lack of foot traffic and in-person sales has been causing SMEs to suffer financially. Thus, thousands have been turning to electronic solutions that have allowed them to continue serving and interfacing with customers.
- Offer Pick-Ups and Delivery
Especially hard-hit by quarantine restrictions, restaurants and retailers have been offering curbside pick-ups and delivery options to loyal customers. If you already host a corresponding eCommerce platform, prioritise making the transition to become a fully-online business—at least in the meantime.
Otherwise, you can let customers know that you’re offering these services across your social media channels or by emailing them directly. Keep in mind that whether or not these services are available to you will depend on the region your business is located.
- Stay in Touch Online
If you have a large roster of customer emails, now is the best time to use them. If you already have a system for offering virtual services in place, using email and social media is the best way to keep existing customers updated. To meet immediate cash flow needs, consider emailing your customers a non-expiring gift card that they can use online or once your business reopens.
- Communicate With Your Landlord, Vendors, and Suppliers
To ease your cash flow crunch, look into other liabilities such as vendors and suppliers from whom you regularly purchase your inventory. With your accountant, reach out to vendors to work out an extension on your usual payment terms or whether they can offer a temporary grace period. If you’re leasing your business location, consider whether your landlord can give you a discount on rent.
- Consider Financial Assistance Programs
Though being able to put the above tips into practice may help keep your business running, SMEs may still need to consider extra financial help. Under the Coronavirus Job Retention Scheme, your U.K. business may qualify for an employee, sick, and tax pay, rates reliefs, grant funds, and other forms of financial SME support. While some programs are U.K.-wide, others may be restricted to certain regions.
Conclusion
Keeping your small business cash flow as healthy as possible during the pandemic is no less than a difficult task—but it isn’t impossible. By moving services online, taking note of your existing inventory, interfacing with third-party vendors and suppliers, and considering options for financial aid, you’re more than likely to sustain a sufficient cash flow during the outbreak.
If you need a hand with your business tax and financial affairs, take us up on an online consultation at 1 to 1 Accountants. We provide accountancy services for small businesses with big-business expertise and have worked with business owners from all walks of life.
