Improving Liquidity in the Era of COVID-19 and Beyond

By Plante Moran

Running out of cash is one of the biggest risks to an organization, and COVID-19 has pushed many businesses right up to, if not past, their liquidity limits. Strategies for managing cash flow go well beyond focusing on income and expenses. To manage cash flow well you also need to look at the three liquidity hotspots: customer management, inventory management, and vendor management.

Here are several key liquidity improvement steps you can prioritize to manage each hotspot. Some can be done quickly to keep you from running out of cash in the short term. Others will improve your liquidity management overall, helping you enhance your strategic positioning, increase your efficiency, and reduce operating risks. Improvements you make now will not only help your business survive the crisis now, they’ll help you thrive in the future, making this a tremendous learning opportunity.