Steps to Reset Business Finances Ahead of New Normal
“There is always a rainbow after the storm comes”, the classic expression is often heard to describe that there are always blessings and good things that come after bad events hit, including when new normal. The problem is, are you one of those people who can immediately get up after the storm subsides and enjoy the beauty of the rainbow, or if you find it difficult to move because you are still confused by the storm. In this case, the parable of the storm and rainbow can describe the conditions of the economic crisis due to the Covid-19 Pandemic which will end soon and change to a new normal period. As a business actor and economic practitioner, you certainly hope that you can quickly rise from the crisis and be able to take business opportunities when the new normal phase comes. For this reason, Irena’s Bookkeeping provides accounting and financial assistance services. For that, you need to take several steps to reorganize your business finances after facing a crisis so that you are better prepared to face the new normal phase.
The five steps are, among others, resetting cash flow conditions, and checking the position of cash, including emergency funds. The first step that needs to be taken to prepare for the new condition is to examine the various components of income and expenditure in a business process. From the income side, it is important to check the position of cash and emergency funds owned by the company during the crisis period or before the new normal period. The reason is, it will affect the business plan when the new normal is in the future. For example, can the amount of cash and emergency funds be diverted for future production purposes, after the rest period ends?
From the expenditure side, you can check what costs were previously trimmed to save money during a crisis. Then, consider the costs that need to be added to streamline the production process when it is new to normal, after previously saving a lot. For example, previously the company cut maintenance costs for production equipment, then issued maintenance costs so that production machines did not break down quickly. The next step is to reset the company’s cash flow conditions. You can re-plan the appropriate cash flow strategy according to the projected changes that occur in the future. Re-planning includes the matter of changing the financial budget according to the estimated new business activities in the new normal phase. This will result in the expected cash flow and financial position according to the planned business activities.Tags: small business accounting company, tax professional