As the effects of COVID-19 continue to impact organizations and their bottom line, many are trying to make sense of how to move forward. After all, there’s no real precedent for the impact of the coronavirus pandemic. It’s simply beyond anything we could have planned for.
However, there are ways to adapt what we know and practice in our organizations to address the impacts of COVID-19. Specifically, the practices of cash flow management and cost containment can help organizations navigate through a time of uncertainty.
It will take speed and flexibility to scale your approach to cash flow and cost containment. But these are key metrics in times of crisis and economic uncertainty. By taking traditional practices for these efforts and adapting their application, you can position your organization to move forward.
Use cost containment to move your organization forward in the wake of the next normal.
What is Cash Flow Management?
Cash flow management involves looking closely at funds that move into and out of your company to identify inefficiencies and make changes that improve the flow. Good cash flow management is a challenge even during the best of times, when money is coming in and going out at a sustainable enough rate to continue and/or grow your business.
What is Cost Containment?
Cost containment involves taking short-term actions to reduce expenses in order to keep your organization viable for the long-term.
When something affects cash flow to the point that changes must be made, organizations often reach for cost containment. In a normal case, you might take one or two steps to address the issue. But chances are, your cost containment plan isn’t sufficient for addressing how this pandemic has impacted your cash flow or your organization as a whole.
How Do You Develop a Relevant Cost Containment Plan?
It all begins with financial modeling. The practice of financial modeling traditionally includes cash flow analysis, fixed cost analysis and asset management. This tells you where your business is at and what impacts a variety of factors may have in the long run. Financial modeling allows you to make assumptions and forecast future financial results.
A proper eye to the future would not be complete without an understanding of your current financial condition. Then you can model how future conditions will affect items like growth, cash flow and profitability. A concrete understanding of the now will help you make strategic, proactive decisions for your organization long term.
Start by asking critical questions about your organization, such as:
A Step-By-Step Guide to Cost Containment and Cash Flow Management
Preparing your organization for a time of uncertainty isn’t easy. It takes critical conversations, a review of your key success indicators and an eye to potential vulnerabilities.
We’ve developed a step-by-step guide to help you walk through cash flow management and a cost containment plan for your organization.
The guide discusses areas of importance for these key financial metrics including:
Are you ready to move your organization forward? Use these steps to assess where you’re at and where you want to go. Then use the cash flow and cost containment tips to help make a plan for now and the future.
Get the Cost Containment Guide
Ready to get the guide? Fill out the form below and you’ll get immediate access to our cash flow management and cost containment guide, as well as an email with a link for later use.
Get Help Setting a Path Forward
Which areas of your business are you most concerned with right now and what have you done thus far to work on that issue? Do you need help improving your processes and discovering the most efficient path forward? At Eide Bailly, we are trusted advisors and we’re here to help you navigate in the new normal for your business.
Key services to help your organization include:
Though there isn’t a true precedent for the way COVID-19 has impacted businesses, we can use proven tools in a new way to meet cash flow and cost containment needs going forward.
The path won’t be easy, but it will be necessary. Let us help you get there.
Want to learn more about the effects of COVID-19 on your organization and what you should consider moving forward? We’ve developed resources to help you make sense of it all.