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Cash and profit optimisation

Managing cash flow and liquidity for COVID-19 resilience

Frank Janik

As countries struggle to cope with the health implications of the COVID-19 pandemic, the economic fallout has been wreaking havoc on various industries. Stock markets are in turmoil, companies are cutting costs and staff displacement is rising. the impact on people as a result of staff lay-offs, lockdowns, travel restrictions and access to basic staples is significant.

Finance is the lifeblood of any organisation, and with the world economy on the brink of recession, an effective financial plan is now more important than ever.

The spread of COVID-19 may very well continue for several months and it is bound to hurt many businesses, which in turn will affect local communities, individuals and families. However, by focusing on cash flow and liquidity, organisations can minimise damage and set themselves up to prosper once the worst of COVID-19 passes and business returns to normal.


Prioritise cash flow

Cash flow is essential to business operations. In times of economic hardship, businesses should take immediate action to reorganise funds. While acting fast on fund management can provide short-term relief, effectively managing cash flow can help build true resilience in times of crisis.

Focusing on cash flow optimisation can help companies reduce unnecessary costs, improve the customer experience, and regain profits more quickly when markets stabilise.

Although cost-cutting can facilitate better cash flow, businesses should proceed with caution as rash changes to financial strategy can be detrimental in the long run. The first step that should be taken is to prepare a three-month cash flow forecast to truly understand the company’s financial needs. A thorough review and analysis will help businesses identify non-essentials and cut spending accordingly.


Manage liquidity

Liquidity is a top concern when the economy slows down. The challenge here is for business leaders to find the right approach. During the early phases of a downturn, it is especially important for businesses to communicate with lenders to quickly address liquidity challenges.

In response to the economic fallout of COVID-19, the Thai government and financial institutions have announced support measures to keep the market from collapsing and to help businesses manage risks. The Thai Bankers’ Association, the Government Savings Bank, Thai insurance providers, and the Government Pension Fund have joined forces to establish a Corporate Bond Stabilisation Fund worth 70-100 million baht to stabilise liquidity and build investor confidence.[1]

Although the government has stated that it is ready to provide support until the situation improves, businesses should also be proactive and implement their own measures to maintain liquidity. Finding adequate revenue streams will be necessary to continue running the business with some semblance of normality.


Find a trusted advisor

In times of economic strife, cash flow and liquidity can be very difficult to manage. Yet even with COVID-19 presenting the biggest threat to global economic stability that we have seen so far in the 21st century, business leaders need not carry the burden alone. Finding a trustworthy business partner to with a thorough understanding of the market can help keep organisations afloat.

At Grant Thornton we advised our clients through the 1997 Tom Yum Goong financial crisis, through the global financial crisis of 2007/2008 and through the flood crisis of 2011. While the situation we are facing now however is likely to be worse then any of these, our experience of managing clients through a crisis can be invaluable in these difficult times. Drawing on our hands on experiences from these situations, we at Grant Thornton have been hard at work a providing guidance and solutions to our clients on how to manage and survive the financial challenges in the wake of the pandemic.[2]The task ahead will be arduous, but by taking appropriate action now and seeking advice from a trusted business partner , organisations can brace themselves for the present and future impacts of the pandemic – and put themselves in far better position to grow again after the storm passes.


[1] See,