We asked Brit Summerill, Partner with NOW CFO what lessons CFOs learned from the last recession. Here are a few things organizations need to do to start protecting themselves.
Cash Flow Forecasting
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13-week projection of the company’s available cash.
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Operational cost forecasting by week for the quarter—inventory, fixed costs, variable costs, payroll, etc.
Establish Break-Even Point
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What is the minimum revenue needed to pay expenses
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Establishing this point will help you put together a model of spending cuts and cash conservation efforts.
Financial Aid Packages
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Many government entities are releasing financial aid packages for business owners that apply.
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The process is an in-depth application submission, asset verification process and agreement documentation.
Comparative Financial Statements
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The government requires a comparison to monthly financial statements from past and current periods.
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This comparison must show loss of revenue and profits.
Calculating Lost Revenue
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This is a detailed record showing the difference between the amount of money you make in a given period versus revenue during the same period last year.
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Keep these detailed records for aid applications; many will ask you to estimate the amount of revenue you lost because of the crisis.
Financial Modeling
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Flexible tools to detail the future performance of a company’s working capital and economic performance.
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Each model must be updated weekly and serves as a decision-making tool that shows the potential consequences of certain decisions before the decisions are made.
Bank Packages
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New requirements for business loans, disaster loans and lines of credit.
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Do you qualify for financial aid?
All written content is for information purposes only. Opinions expressed herein are solely those of Fairlight, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to other parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.
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