Protecting Cash Flow in your Business

Whilst the Covid-19 situation is unprecedented, experience of past economic disruption, such as the 2008 financial crisis, does provide some insight into what is likely to happen in terms of Cash Flow.

The impact is not uniform

Some businesses will find they have unexpected opportunities. Take Louis Vuitton for example; repurposing its perfume and cosmetic gel production lines to make hand sanitizer and online retailers experiencing a surge in demand. 

However most businesses will initially be preoccupied with short-term cash preservation and cash-flow, together with managing emerging new risks. Subsequently, they will seek to position themselves for the future, beyond the immediate crisis.

Tax Payments

One of the biggest cash-flows in any business. Significant cash flow positive results can be created in a wide range of ways with some of the most well-known being:

  • R&D tax credits
  • VAT planning
  • payroll or benefits planning
  • Time to Pay arrangements
  • creating tax losses from a fall in asset values

New Risks & Risk Management

Businesses will be dealing with new areas of risk and risk management, which may mean their structures need to be adapted, debt restructured, investment plans altered, or supply chains modified. All of these issues will have a tax dimension and we can work with you on them. 

Positioning for the future

In any economic disruption once the immediate steps are taken to protect the business, and to cover risk, there are generally opportunities to prepare or improve the business for the aftermath of the crisis.

A fall in share prices will mean stock options or other incentives are ‘underwater’ having lost their incentive effect. They can be reset to retain and incentivise key staff at no cash cost and get a tax deduction along the way in some cases. Supply chains may need to be changed or rebuilt or there may be opportunities to accelerate business transformations that were already underway.

At a personal level, falls in the value of assets may provide an opportunity for passing assets down through generations.

Protecting first, with good cash-flow and risk management, and then positioning for the future beyond the crisis.  You will be thinking of all these things and more and we are here to help.

Get in touch

To discuss any of the above topics please get in touch using the form below.

Your personal data is collected by Mazars in South Africa, the data controller, in accordance with applicable laws and regulations. Fields marked with an asterisk are required. If any required field is left blank, it will not be possible to process your request. Your personal data is collected for the purpose of processing your request.

You have a right to access, correct and erase your data, and a right to object to or limit the processing of your data. You also have a right to data portability and the right to provide guidance on what happens to your data after your death. Finally, you have the right to lodge a complaint with a supervisory authority and a right not to be the subject of a decision based exclusively on automated processing, including profiling, that produces legal effects concerning you or significantly affects you in a similar way.

Related Pages