Responding to Cash Disruptions from COVID-19
With economic activities slowing down, CFOs are experiencing significant cash and working capital constraints. Many companies have already revised their revenue guidance downwards indicating delays in cash conversion cycle and lower sales with a rise in critical suppliers’ spend. Also, uncertain supply chain stemming from COVID-19 is putting a strain on rising working capital demand.
Your organization may be vulnerable to liquidity risks if you answer “no” to any of these questions:
- Have you identified and assessed the impact of different macro economic scenarios on your cash forecasting models?
- Have you identified all the variables that would impact your revenue and costs?
- Do you possess the right capabilities and tools in place to measure and report these risks in real-time?
EXL Recommended Actions
What You Should Do Next
Now is the time for finance leaders to put cash models to test. To help build a contingency plan, forecast various scenarios regarding how the situation of your cash would look in next seven to 30 days based on the variable input triggers.
How EXL Can Help
Cash Forecasting Digital Dashboard Suite to monitor real-time liquidity performance
A cash forecasting dashboard will assist in generating actionable insights in optimizing accounts payable/receivable, cash and working capital management, and other benefits.