March 9, 2011– RSM Bird Cameron offers the following advice to businesses on managing their finances after the recent natural disasters:
1. attack the crisis head on. The more assertive you are the more likely it is that you will be able to turn the situation around sooner. Assess your current situation and make immediate changes that will have the largest positive impact on cash flow and revenue first. Set objectives and develop a plan to help you achieve them.
2. get information immediately. Ask your bank if you are able to restructure your business loan without incurring fees. Also ask for any information about extra or additional financial support or credit to ease financial stress in the short term. Speak to suppliers as soon as possible about extending their credit terms to give you breathing space on your current bills. Many utilities have hardship clauses in their contracts that you can enable.
3. communicate with customers. Make sure they are aware of your current situation, why you may have extended delivery times and your expected recovery period. Ask if they can pay any outstanding invoices sooner. Many loyal customers will stick by you if they understand your situation and you keep them informed as you get back on your feet. If you are open for business, make sure your old customers know that too and encourage them to place more orders sooner by offering aggressive product discounts or service deals. It’s critical to get cash flowing into the business as quickly as possible.
4. hit the slow motion button on spending. Only buy the minimum inputs you need for your business to operate. Keep inventory in line with revenue and rebuild as you restore profitability. Overcompensate for a lack of product range or slower delivery times by focusing intensely on customer service.
5. recover together. Talk and confide with other business owners about how they are managing and coping. They may have discovered resources you are not aware of or be able to offer new ideas. Share resources to save money, for example cleaning or production equipment. Some competitors may let you use spare capacity on their production equipment while you get back on your feet.
Andrew Graham, director – business solutions, RSM Bird Cameron said. “For many businesses, recovery from these flood events is possible. It won’t be easy, but with objective analysis, swift action and hard work they can get back on their feet sooner than they think. It is obviously an emotional time for many business owners – the challenge is to separate that from making a logical assessment and getting started on recovery.
“Businesses should access all available grant monies as soon as possible to assist ease the financial burden and explore any compassionate funds established by various charity organisations that may be able to offer additional assistance.”
About RSM Bird Cameron
RSM Bird Cameron is the largest mid-tier accounting firm in Australia and offer a full range of specialist advisory services, including business consulting and advisory, assurance and advisory, taxation consulting, corporate consulting and turnaround and insolvency. RSM Bird Cameron is a core member firm of RSM International, the sixth largest network of independent accounting and consulting firms in the world.