By Mike Kienlen, Partner, Armstrong Watson

THE last few weeks have definitely been a challenge for most, if not all, businesses.

The opportunity to furlough workers and the corresponding grant for their wages has no doubt provided some relief, and the Chancellor has seemed keen to limit the number of business failures by offering deferrals, payment holidays, loans and grants.

The lockdown will continue for some time yet, but the Government’s actions are suggesting that the aim is for the UK to start returning to some sort of normality by the beginning of June. So the question is, how can you do that?

Most businesses have focused on their immediate cash requirements over the last few weeks, using short term cash flow forecasts to understand the actual cash coming in and what is going out. Using these forecasts as a base, businesses should now be starting to look at what the next few months look like. Taking the following points into consideration should help:

1. Speak to your existing customer base – it will help you to understand what their immediate/short-term needs look like.

2. Update your short term cash flow forecast once you have spoken to customers so that you have a more accurate picture of the cash position.

3. Review your work in progress to establish what can be turned into cash quickly – concentrating some of your initial efforts on this will assist you with your working capital.

4. Identify what additional purchases you need to make in order to complete existing orders and from where you can source the relevant items.

5. Book your haulage in advance so that you minimise the chances of any delays in sending out finished goods.

6. Consider what the return to work looks like for your employees – do you need to adjust working patterns to reflect pipeline and social distancing?

Many businesses are likely to need some additional help as they start back up again. Cash will be tight whilst the working capital cycle returns and there is likely to be some flex needed with payment terms. Starting to prepare a longer-term cash flow forecast will help you to understand what additional funding requirements you may need, and in what form.

Taking action now will ensure that the dark days ahead will end sooner rather than later. If you are concerned about what the future holds for your business or need some advice about what steps you should be taking next, please get in touch with our team who will be able to help you. Call 0808 144 5575 or email