Managing Your Cash Pressures

We are aware of all our clients and that most of you are experiencing significant operational, financial and liquidity challenges as this COVID-19 pandemic spreads and the government’s response and strategy develops.


As small to medium businesses, the number one concern from our clients has been how to manage the current cash pressures to ride out this time of unprecedented uncertainty.  We would like to pass-on and share advice and experiences that are available to us through our business planning knowledge to support you at this critical time.


We have identified some steps to assist owners, directors and managers develop a stabilizing vision and plan. You should ask yourself the following questions:


  1. What is our current financial situation?
  2. What action can and should we take to protect ourselves for the future?
  3. How can we manage internally & how can we mange external factors?


  1. What is our current financial situation?


If you have not already done so, you should immediately review your current cash-flow and then calculate the implications in the short- and medium-term to your business.

  • Have you updated your budgets, annual business plan and forecasts for the rest of the year?
    • Identify potential worst-case scenarios – start with an immediate 13-week assessment and then prepare a longer-term assessment, as we do not know how long the shutdown will last and how long it will take for the economy to kick-start again.


Additional Funding

Do you have additional borrowing capacity?

Can you access current funding initiatives from the government?


Financial contractual obligations

Are you bound to loan and leasing agreements?

Review them and contact your lender in relation to flexibility on these payment obligations?


Prepare an emergency “What If” plan for your company

What is the worst-case scenario for you company?

  • Identify potential problems, including staff sickness, temporarily having to close your doors to business etc.
  • Identify where you can safe costs and what, if any, options are open to you including but not limited to stock liquidation, staff layoffs, key staff responsibilities and authorization, and a reduced or modified operating business model.
  • Check your business insurance policies under the “Interruption of Business” clause.


Stakeholder management

Are there other stakeholders eg shareholders, pensions, regulators, credit insurers, credit card companies that you need to consult in this revised planning process?


  1. What action can and should we take to protect ourselves for the future?

When you have completed the above assessment of your current financial situation, you should take immediate action to ensure you can (at a minimum) maintain this position, alongside identifying opportunities to access new financing, if required. Some suggestions we have are:

  • Immediate implementation of cash conservation measures, which might include changing staff working hours and putting non-essential orders on hold in the short-term.
  • Discuss waivers, extensions or easing of repayment terms on current contracts.
  • Seek additional funding (preferably from existing lenders), other opportunities to generate cash and funding and liquidity options.
  • Consider whether liabilities and or cash can be accessed via a managed exit or accelerated disposal process of underperforming parts of the business.


  1. Manage internal & external stakeholders


You should identify who your key internal and external stakeholders are. It is important to understand their position and the implications your business situation will have on their business. Here are some points that should make this difficult process a little easier:


Identify them

This list will get you started:

  1. Staff
  2. Landlord
  3. Banks
  4. Credit Card Companies
  5. Auditors
  6. Pension Trustees
  7. Clients/customers
  8. Suppliers
  9. Insurance Companies
  10. Industry Regulators


Open Communication

One thing we have learned over the years with our clients and the challenges they have experienced with their business is that not talking about problematic situations have proven to be very damaging for everyone involved.

Everyone is unsure of the future at this volatile time and we are all hungry for information and guidance.  If you devise a clear plan of consistent communication with your staff, your suppliers, your stakeholders, including all your financial and contractual obligators, you can keep lines of communication open, protect the future of your business relationships and work together to resurface after the crisis has past.


Legal Obligations

Over the course of reviewing your business and financial plans and forecasts, issues may be identified which highlight risks to going concern. It is important to remember that one of the duties of the company Directors’ is to ensure reckless trading risks are avoided.  The responsibility of the Directors is towards protecting the interest of the company’s creditors – which sometimes can result in a difference from the interest of the shareholders.  This can be a very difficult thing to do and may risk the solvency of the company but is an essential point to remember to ensure there is no reckless or fraudulent trading. To help making this decision:

  • It is essential to follow the steps above and revise budgets and business plans.
  • Keep a record of the plans and budgets revised along the way with backup if possible to support any and all decisions you have made
  • It may be worth considering a cessation of trading activities for the duration of the crises.


*Reckless trading refers to a director taking illegitimate business risks. Material factors

to assess that a business risk is legitimate include whether: The risk was fully understood

by those whose funds were at risk. The company was insolvent and continued to trade 

over an extended period.


*Fraudulent trading in company law, refers to doing business with intent to defraud creditors,

for example incurring credit that cannot be paid.  This may be subject to civil and criminal



We strongly advise seeking professional advice on these matters.  However difficult the circumstances we are currently in, it is worth remembering that there will also be a day of reckoning.

We can help, contact us at 01-5411446 or

Stay safe, stay well.