Economic conditions experience erratic fluctuations from time to time, and business activities change very quickly. In the process, business actors are required to always be alert to external problems, especially in crisis conditions. In this case, the main effort that needs to be done is to manage cash flow efficiently. For every company, cash flow is a very vital component in business continuity, especially to cope with changes and business competition. Cash flow is like a pulse that cannot stop working and flow blood if you want to continue living. For that, you can anticipate all the worst by using resources. Therefore, cash flow needs to be managed wisely, especially in crises.
Several strategies that can be implemented to manage the company’s cash flow efficiently in times of crisis include evaluating the cash inflows and outflows carefully, arranging a timely collection schedule, delaying investment, and rearranging spending on stock items. Also, review debt payments, and compile cash flow reports regularly using the help of technology. In a crisis, you need to do a careful evaluation of cash flow, in terms of incoming and outgoing. Any movement in business performance, whether operating, investing, or financing the company within a certain period will affect changes in these components. When the incoming cash flow is greater than the outflow, it will show positive cash flow, on the other hand, when the incoming cash flow is less than the outflow, then what happens is negative cash flow.
Evaluating the cash flow statement is useful for knowing the receipts and disbursements of cash and cash equivalents so that it helps you to analyze the ability to generate net cash flow in the future. During crisis conditions, companies are certainly vulnerable to their ability to fulfill their obligations. Therefore, a careful evaluation of cash flow is necessary so that you can assess the company’s ability to meet the debt service obligations and show conditions when it requires outside funding.