LehmanBrown International Accountants had the pleasure to present the webinar on Managing the Pandemic Cash-flow Calamity and Business Risk to the Finance and Taxation Working Group of the European Chamber of Commerce in China.

With the global economy still hanging in the balance as the COVID-19 pandemic rages on across the world, businesses in China has to now more than ever pace themselves financially to survive and stay operational.

The presenter Russell Brown OBE, Managing Partner of LehmanBrown International Accountants, started by sharing his past experiences, during the economic crashes as well as the previous epidemics in China, which have influenced him greatly in the techniques used today to forecast and manage cash-flow.

Using a diagram showing the famous Valley of Death, normally used to indicate the financial journey that a startup would go through, he explained that this is similar to what businesses in China are facing as their cash-flow is affected by the pandemic.

In this current situation what matters most is to have a clear forecast, taking into account all aspects from expenses, regular incomes, to outstanding client debts, and done every week in the situation where a business is facing dire circumstances.

Russell went on to advise that the key to a successful forecast is to play around with the numbers to try different scenarios possibly even creating two forecasts, a best outcome forecast, and a worst outcome forecast both grounded on plausible and realistic facts.

Once the forecast has been made Russell explained the importance of having everyone in the business involved in the effort to make sure the forecast comes to fruition, which may include setting KPIs, collecting receivable incomes, asking suppliers for favorable credit terms, and so on.

To facilitate the collection of receivable income it is essential to begin reviewing clients and the contracts which have been signed with them, along with creating incentives for them to pay as quickly as possible to increase the business’ cash-flow.

In the situation where the business has to make payments, what matters is to trickle the loss of income as much as possible, by contacting suppliers and negotiating to delay the payment or even lower the total amount due.

Another major factor to facilitate cash-flow management is to stay up to date with the latest government policies. Russell presented the most recent policies which businesses should try to apply for or check immediately with their local government.

Drawing the presentation to a close, the participants had asked questions regarding acquiring loans and using stock as credit, dealing with recent hires and the complications of applying for loans across different nations.

For those of you who may have missed the webinar or would like to receive the presentation, or would like to enquire for your business needs, please feel free in contacting LehmanBrown via email enquiries@lehmanbrown.com

The webinar was very well received with many happy participants attending and LehmanBrown would like to extend an enormous thank you to the European Chamber of Commerce in China for the opportunity to help European businesses in China and look forward to working together again.