As the current crisis changes economic landscapes and businesses across the world, leaders are being forced to make tough choices because of lockdowns and strict measures implemented by governments to contain the spread of the pandemic. Adapting in order to manage workforce and improve cash flow requires a methodical approach that doesn’t let your customer down while switching gears. Not losing sight of the larger picture (of reliability and trust in a unified system that runs smoothly) here are ways in which you can alleviate the impact of slowdown caused by the current crisis:
1. Cut Down Hours Of Operation In Physical Stores For The Time Being: Temporarily reducing the number of hours you expect your workforce to report into at your physical store/ warehouse will not only save cash in overhead expenses, but also payroll expenses. By doing this, you offer a safer working environment to your workforce and can allocate store employees to other locations, fulfilling online orders easily that help save money on operating costs.
2. Delay Or Defer Incentive Compensation: During these unprecedented times when the future of your business may look uncertain, it is wise to delay or defer incentives for when your business picks up. You can reallocate the cash set aside for incentives to cover payroll expenses.
3. Give Customers More Payment Options: From taking card payments, offering online payments and auto-deduct option, to encouraging cash payments, make the cash-flow cycle more dynamic.
4. Incentivise Early Payment And Penalize Late Payments: With customers looking to cut costs too, incentivize those who pay their invoice early or offer discounts on products and services for those who routinely pay. On the other hand, penalise those who don’t prioritise your invoice.
5. Re-think Executive Salaries: A temporary dip in executive salaries for a predefined period will help build trust and loyalty in employees as they see a collective banding together of senior leadership. Re-enforce commitment by setting example for others to follow suit as you pivot your business model to cope with the current crisis.
6. Know your numbers: In order for one to take any informed action or strategy, one needs to know the exact position of your cash flow and budgets, rather an overall picture of how your business is actually doing. Is your system infrastructure geared to give you this information quickly and accurately? A top of the line financial management system or and ERP would make your job easier.