Surviving COVID-19: ideas for unlocking hidden cash

As the economic toll from COVID-19 continues to mount, companies of all sizes are rapidly evolving in order to survive. No one is immune to its impact and business owners are scrambling to evaluate all available options. Despite years of prudent budgeting and cost optimization, companies are now faced with the daunting task of finding creative ways to shore up liquidity. Further complicating the situation, most businesses are not in a position to pursue major investments – such as in more efficient equipment to enable future cost savings, for example – in the current capital-constrained environment. So where does that leave us? In a difficult position, but we’re here to help.

First, there is no magic bullet. Focusing on a risk-based approach, where incremental ideas can yield meaningful liquidity or savings, avoids broadly disrupting the organization. Generally speaking, the larger the opportunity, the larger the organizational impact. Consequently, all activities should be balanced against the overall impact to the organization relative to the time to implement an overall cash yield.

Idea matrix: yield versus risk versus time

Financial liquidity enhancement actions

• Debt refinancing, renegotiations and lease amendments – With a potentially high-yield impact and minimal time to implement, debt term amendments or renegotiations should be at the top of your action list. Lenders are likely not in a position of leverage and are highly likely to engage in dialogue around temporary – or even permanent – relief.

• Working capital optimization – Working capital management optimization can unlock millions of dollars of tied-up capital through optimization of these processes:
• Tax strategy – Efficient tax planning can lead to significant savings, including some that may reduce cost in a timely manner. Below are some incremental actions to consider taking:
  -Property taxes administration and appeals