This is a guest article by Alan Burgess, Director Owner of Masterframe Windows Ltd:
As we each reflect upon self isolation, the restrictions to halt the spread and the past times we are missing, whilst the NHS staff, doctors, nurses and other emergency services work tirelessly to combat this plague our thoughts must turn towards LAC, Life after Covid.
Be sure, life will resume after this virus loosens its grip on the country. Different, certainly, normality, maybe but the sun will rise again, the birds will still sign their songs and human nature will make us hold onto cash. This however will be a further disaster.
After the financial crash 2008, the circulation of money dried up. If each person were to pay 90% of their bills (keeping 10% because there isn’t enough money at the moment) by the time the 2nd person in the chain, does the same etc, there’s barely enough cash to pay the last person 10% of what they were expecting!
With government loans, grants, VAT holidays etc and staff costs being covered with Furloughed scheme, it is vital that we each play our part to get the cash flowing again. Retail customers and large companies alike, need to pay their contractors and suppliers promptly, no delays or excuses, so that medium sized companies can themselves pay the smaller firms and their suppliers.
Dont misunderstand me, its going to be challenging. Most businesses juggle cashflow monthly (if not weekly), and with everything thats happened, it will be so easy to say, “theres no cash available” but this will simply delay our individual recovery and that of the country.
Additionally, we are highly likely to see preferencial treatment given to those who do pay their bills on time, again its human nature, companies will be reluctant to offer extended terms to those they offered, pre virus. Obtaining the governements funding should therefore pay dividends, even though it creates a financial noose for the term of the loan.
Financial prudency and good planning now, will pay dividends later. Dont wait for 3 or 4 weeks, start now to ensure your business is adequatly funded for a quick recovery, post Covid.
Perhaps we will also reflect upon the salaries of those critical front line staff who have given so much, at the time of greates need!
Discuss. Let me know what you think!
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