Cashflow is king

September 27, 2021

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For our clients around New Zealand, this is no doubt a challenging time. Battling the ongoing effects of Covid-19, lockdowns and subsequent business interruption, has put a strain on business cashflow and preparations for the post lockdown recovery.

With the majority of the country now at a reduced alert level, we are seeing a return to more “normal” trading patterns and businesses looking to invest for growth. Acquisition of plant and equipment, whether for replacement or fleet expansion, has remained strong throughout the last quarter, and indications are this will continue as we exit the current lockdown phase of the pandemic.

During testing times like these, cashflow is important for all businesses, especially those in the SME category. Limited capital and reliance on mortgage-backed banking facilities, often combine to restrict the options available to SME’s, when cashflow becomes an issue. We strongly suggest contacting your trusted financial advisor/broker to discuss options available before a concerning situation becomes a problem. Government support packages should be accessed where applicable and appropriate working capital and or overdraft solutions explored.

A number of industry bodies have published guides that offer advice that may be applicable beyond the actual industry sector. NZTE has provided a useful online guide to help businesses understand their cash position and some options to maintain essential cashflow. The 5 step process prompts questions about managing cashflow and evaluates the options required to create an action plan. Click the link here to learn more.