Based on market research and general feedback from the community, a number of industries within the Australian economy are showing promising signs of recovery.  However, uncertainty is being faced by all organisations relying on the government stimulus packages, with less than 100 days until the end of the JobKeeper scheme, other stimulus measures, and the end to the moratorium on insolvency and debt enforcement laws.

Now that most organisations have implemented business continuity plans, stabilised their operations and are experiencing recovery, planning for post stimulus and the October to February period now needs to be the priority.

To date, many organisations have elected to defer the payment of liabilities as they seek to preserve cash reserves in the short term.  As a result, these businesses are carrying significant liabilities that will require a plan to settle that also ensures underlying business operations are not impacted.  Planning, scenario analysis and cash flow forecasting should be elevated as Owners, Directors and Executive teams deal with the next phase of steering the organisation through the COVID-19 scenario.

To help with your cash flow forecasting, you should consider:

  • Minimum/realistic revenue levels – using current trading levels as indicators of future performance;
  • Statutory liabilities – in our experience being early to negotiate payment arrangements could lead to more favourable outcomes, don’t wait;
  • Other deferred liabilities – as normal operations return, the settlement of deferred rental and other arrangements with creditors, these will need to be factored into the return to ‘normal’; and
  • Workforce requirements – there exists a cost scenario that needs to be considered but our advice is that you focus on productivity in your teams and how this should be maximised against revenues and costs.

Should you be interested in external input and a review of your planning and operations, our friends at 888X have experience and frameworks that could be advantageous to avail yourself of at this time of extreme uncertainty.

To make contact with the 888X team, reach out to them at contact@888x.com.au

To find out more on improving your immediate cash flow, be sure to get in touch with us today to discuss how ScotPac can help.