How Small Business Owners Can Overcome Cash Flow Challenges During COVID-19

The COVID-19 triggered economic crisis is fast evolving and impacting businesses differently. Small business owners are struggling to juggle between keeping social distance, staying safe and keeping the revenue channels open. Cash flow challenges are the most profound at this time and solutions must be prioritized to keep the business afloat.

We spoke to veteran bookkeeper Tania Usowicz of Building Blocks for Business about handling cash flow. Her responses were insightful and practical. She will inspire you on how to overcome cash flow challenges during this economic slowdown.


Hire a professional bookkeeper 

If you are thinking ‘an obvious thought by a bookkeeper.’ Just take a few seconds to objectively think through the benefits a professional bookkeeper would bring to the business.

For starters, you need your books regularly updated, accurate and readily available. Secondly, your business is your passion and it deserves a total focus. According to Tania, bookkeepers are what you need now more than ever. They provide you with:

  • Better budgeting decisions, knowing exactly where your money is going
  • More hours in your day to focus on your business
  • Understand the seasonal flow of your business
  • Understand the key metrics in your business: revenue, costs, profitability, etc.

These are services that you desperately need for you to surmount any cash flow challenges.


Renegotiate with your suppliers and service providers

How’s your relationship with your suppliers? If you’ve had a not-so-good relationship, especially about payments, now is the time to eat the humble pie. However, if you’ve had a great relationship, now’s the time to cash-in on that investment.


It may be hard for you to figure out your negotiating position without solid evidence. Work with a bookkeeper to compile information about previous payments for each supplier. In Tania’s words “Whether you sell handmade possum wool socks, enterprise software, or provide beauty services, there are two things we can guarantee about your business: you earn money and you spend it. Bookkeepers are the ones who help you keep track of all that.”

But expect honesty. As Tania puts it, “A good bookkeeper never cuts corners, and they are indispensable to business owners who want to spend time growing their business, instead of maintaining it.” 

After you meet with the bookkeeper, arrange to meet with the suppliers and negotiate to avert the cash flow challenges.


Seek financial support programs 

Perhaps you’ve taken a bigger financial hit than you anticipated and you need a shot in the arm. You can reach out for financial support such as the government’s Business Finance Guarantee Scheme or the COVID-19 Wage subsidy and ease some of the cash flow challenges.

Keep in mind that professionally prepared books will help you to prepare a much stronger case for your business. You may need a bookkeeper to prepare for this and, as Tania advises “more importantly, to account for this in your financials and payroll systems.”


Maintain contact with existing clients 

The above moves will help you take care of the back end of cash flow. But there’s only one way to overcome cash flow challenges – keep the revenues flowing.

Your first love – your clients – hold the keys to unlocking revenue.

Stay alive on the digital platforms, keep chatting and interacting with them. We may no longer be under a level-4 lockdown but people are still wary about non-essential movement. So reach out to your clients and keep engaging.


Lastly, Adapt and Innovate 

As you engage with clients using new channels, find new ways to sell and do deliveries. Try to tap into new markets and innovate new products.

Don’t forget to find new ways to run the back end too.

A professional bookkeeper can help you adopt new ways of doing business. In Tania’s words “With our pragmatic approach and a unique ability to see the big picture, we are always future-focused.”  Bookkeepers will keep track and forecast the cash flow as you take the above measures. They’ll also help you to overcome cash flow challenges, as you invest in the future.

This website is written as a general guide and is not personalised advice. It is not intended as personal financial advice,nor is it specific advice to your situation. The author has written this in good faith and disclaims any liability from any action or inaction from how you may use this website or the results it may or may not achieve. Government, bank, company, insurer and lending policies, as well as other policies, procedures, and information in this website are likely to also change from time to time, and rules and decisions and policies may be applied differently and/or on a case-by-case basis. These rules may also change from the approximate time this was written. You are encouraged to recheck if these matters are accurate and up to date. By reading and using this website, you agree to hold the author, associated entities and/or associates, harmless.