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Liquidity | financing

 

It is currently hard to say whether this pandemic will quickly die down – or drag on for an extended period. Experience from previous crises (9/11, financial crisis, franc exchange rate crisis) suggests that aftershocks are likely. Even if the first ‘quake’ is well cushioned, we should brace ourselves for bumps further down the line. In such cases cash is king. The most decisive element in any time of uncertainty is to safeguard a company's liquidity - and gain time to recover. Our financing specialists support you with targeted and expert financial planning advice (procurement of debt and equity). 

 

Checklist

  • Assess the impact of currency risks.
     
  • Assess your liabilities.
     
  • Be proactive in your dialogue with banks and other stakeholders in case the need arises for debt restructuring or alternative sources of financing.
     
  • Create an overview of available lines of credit and use them if necessary.
     
  • Research government financial aid programmes.
     
  • Reduce your accounts receivable: Your customers could find themselves unable to pay in the future so speak to them now about any unpaid receivables.
     
  • Give your sales employees new invoicing instructions. Consider introducing advance payment for services.
     
  • Try to negotiate longer payment terms for your own company and delay payments - this is one aspect of active cash management.
     
  • Take cost-cutting measures to protect liquidity. Limit projects that are not currently essential for operations, or postpone them if possible. Reduce your expenses for external providers, freelancers, marketing, etc.

 


 

Related links

PDF: Increasing your financial planning certainty

PDF: COVID-19 Transfer Pricing Considerations