While asset prices were high and generating good profits, it was tempting to neglect cashflow and working capital management. For companies to be able to operate successfully in a downturn they need to return to the fundamentals of where, when and why cash leaves a business.
Getting ‘back to basics’ through for example, daily reporting of the cashflow position can help to identify where money is getting lost or lying idle to improve performance.
Taking simple ‘back to basic’ steps such as this can assist in optimizing liquidity, available cash and working capital to companies through this lean period and build business resilience. This can allow companies to capitalize on new business opportunities that may emerge and place companies in a favorable position when the market turns.