{"id":71302,"date":"2020-04-06T09:10:19","date_gmt":"2020-04-06T07:10:19","guid":{"rendered":"https:\/\/tcm.be\/crisis-cash-flow-management\/"},"modified":"2025-11-26T19:54:37","modified_gmt":"2025-11-26T18:54:37","slug":"crisis-cash-flow-management","status":"publish","type":"post","link":"https:\/\/tcm.be\/en\/crisis-cash-flow-management\/","title":{"rendered":"Crisis cash-flow management"},"content":{"rendered":"\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"\/wp-content\/uploads\/crisis_cash_flow-scaled.jpg\" class=\"wp-image-9626\" alt=\"\" title=\"\"><\/figure>\n\n\n\n<p>It is too early for statistics on business casualties caused by the COVID-19 pandemic. However, one can be certain that those who will survive are the one\u2019s who can manage their cash-flow. After having defined its<a href=\"https:\/\/tcm.be\/en\/coronavirus-continuity-of-tcm-services\/\">crisis policy<\/a>, TCM upgraded its management \u201cdash board\u201d to get a more dynamic view of the situation. \u00a0<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Crisis impact on business<\/strong><\/h4>\n\n\n\n<p>Depending on the sector or even on each company, the crisis can lead to either an increase in sales or a drastic reduction. Superstores, home deliveries, production of material such as masks, disinfectant, test kits, etc. which are in short supply due to the circumstances. However, most of the world\u2019s entrepreneurs fall victim to an abrupt drop in their sales. Some creative businesses shift their production to produce products in demand, for instance restaurants becoming delivery caterers or our client the \u00ab\u00a0<a href=\"https:\/\/www.tiensesuikerraffinaderij.com\/nieuws\/de-tiense-suikerraffinaderij-gaat-desinfecterende-gel-produceren\" target=\"_blank\" rel=\"noopener\">de Tiense Suikerraffinaderij\u00a0<\/a>\u00bb\u00a0 (sugar refinery) who now produce disinfectant gel.\u00a0 Nonetheless, the manager\u2019s reliable horizon is nowadays set to very short term. The company\u2019s working capital requirements also change at short notice. \u00a0<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Working capital requirement in crisis times<\/strong><\/h4>\n\n\n\n<p>Whatever its size and age, any company has a requirement for working capital (WCR).<a href=\"https:\/\/en.wikipedia.org\/wiki\/Working_capital\" target=\"_blank\" rel=\"noopener\">Working capital<\/a>stands for the liquidity that the company needs at hand to finance current activity, since clients\u2019 payments deriving from such activity take time to be paid.\u00a0 It\u2019s like in a home kitchen where you need an oven and electricity, and naturally also to first buy the chicken before you can roast it, then eat it. This WCR varies from one company to another, depending on its business model. WCR can be negative (meaning you get your clients\u2019 payments before you start paying on producing what you sell). Risks can be:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n\n<li>An increase in sales: your working capital increases (to finance more production);<\/li>\n\n\n<li>A reduction in sales: your WCR increases as a percentage of your turnover, because many charges do not decrease or only slightly in proportion to sales. At the same time your working capital decreases with your income.<\/li>\n\n<\/ul>\n\n\n\n<p>\u00a0<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>In any event: watch your cash-flow<\/strong><\/h4>\n\n\n\n<p>To finance your WCR, there is only your cash-flow (sourced by your activity or borrowed). Managing your cash-flow carefully is \u2013 more than ever \u2013 paramount in pandemic times. For years, TCM had its dashboard listing key facts including income, outgoings and liquidities. Our development was stable (+21% turnover in 2019), trends were acknowledged, and our tool was satisfactory.\u00a0\u00a0 But the brutal occurrence of quarantine has forced us to implement new parameters and scenarios in our analysis model. We have therefore developed a progressive (and graphic) view of the components of both our income and our expenses; which allows you to make assumptions and assess their consequences. These are the kinds of business games that you play as a student, but more rarely in a small business environment that functions. As a debt collection institution, we have noted that, in the last 15 days, we have received 20% less new claims as compared to January and February. Incoming calls from debtors have dropped by 60% in the same period. Collections (debtor\u2019s payments) have dropped as well although less than first anticipated. We\u2019ll come back to this when we have more perspective. \u00a0<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Conclusion<\/strong><\/h4>\n\n\n\n<p>In a few months, we will establish if some have had luck (Euromillions is still running) or have understood how to maintain their cash-flow and manage their working capital requirements. \u00a0 TCM collects your receivables in Belgium and more than 100 countries.\u00a0 Please<a href=\"https:\/\/tcm.be\/en\/contact\/\">contact us<\/a>if you wish details.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"\/wp-content\/uploads\/crisis_cash_flow-scaled.jpg\" class=\"wp-image-9626\" alt=\"\" title=\"\"><\/figure>\n\n\n\n<p>It is too early for statistics on business casualties caused by the COVID-19 pandemic. However, one can be certain that those who will survive are the one\u2019s who can manage their cash-flow. After having defined its<a href=\"https:\/\/tcm.be\/en\/coronavirus-continuity-of-tcm-services\/\">crisis policy<\/a>, TCM upgraded its management \u201cdash board\u201d to get a more dynamic view of the situation. \u00a0<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Crisis impact on business<\/strong><\/h4>\n\n\n\n<p>Depending on the sector or even on each company, the crisis can lead to either an increase in sales or a drastic reduction. Superstores, home deliveries, production of material such as masks, disinfectant, test kits, etc. which are in short supply due to the circumstances. However, most of the world\u2019s entrepreneurs fall victim to an abrupt drop in their sales. Some creative businesses shift their production to produce products in demand, for instance restaurants becoming delivery caterers or our client the \u00ab\u00a0<a href=\"https:\/\/www.tiensesuikerraffinaderij.com\/nieuws\/de-tiense-suikerraffinaderij-gaat-desinfecterende-gel-produceren\" target=\"_blank\" rel=\"noopener\">de Tiense Suikerraffinaderij\u00a0<\/a>\u00bb\u00a0 (sugar refinery) who now produce disinfectant gel.\u00a0 Nonetheless, the manager\u2019s reliable horizon is nowadays set to very short term. The company\u2019s working capital requirements also change at short notice. \u00a0<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Working capital requirement in crisis times<\/strong><\/h4>\n\n\n\n<p>Whatever its size and age, any company has a requirement for working capital (WCR).<a href=\"https:\/\/en.wikipedia.org\/wiki\/Working_capital\" target=\"_blank\" rel=\"noopener\">Working capital<\/a>stands for the liquidity that the company needs at hand to finance current activity, since clients\u2019 payments deriving from such activity take time to be paid.\u00a0 It\u2019s like in a home kitchen where you need an oven and electricity, and naturally also to first buy the chicken before you can roast it, then eat it. This WCR varies from one company to another, depending on its business model. WCR can be negative (meaning you get your clients\u2019 payments before you start paying on producing what you sell). Risks can be:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n\n<li>An increase in sales: your working capital increases (to finance more production);<\/li>\n\n\n<li>A reduction in sales: your WCR increases as a percentage of your turnover, because many charges do not decrease or only slightly in proportion to sales. At the same time your working capital decreases with your income.<\/li>\n\n<\/ul>\n\n\n\n<p>\u00a0<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>In any event: watch your cash-flow<\/strong><\/h4>\n\n\n\n<p>To finance your WCR, there is only your cash-flow (sourced by your activity or borrowed). Managing your cash-flow carefully is \u2013 more than ever \u2013 paramount in pandemic times. For years, TCM had its dashboard listing key facts including income, outgoings and liquidities. Our development was stable (+21% turnover in 2019), trends were acknowledged, and our tool was satisfactory.\u00a0\u00a0 But the brutal occurrence of quarantine has forced us to implement new parameters and scenarios in our analysis model. We have therefore developed a progressive (and graphic) view of the components of both our income and our expenses; which allows you to make assumptions and assess their consequences. These are the kinds of business games that you play as a student, but more rarely in a small business environment that functions. As a debt collection institution, we have noted that, in the last 15 days, we have received 20% less new claims as compared to January and February. Incoming calls from debtors have dropped by 60% in the same period. Collections (debtor\u2019s payments) have dropped as well although less than first anticipated. We\u2019ll come back to this when we have more perspective. \u00a0<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Conclusion<\/strong><\/h4>\n\n\n\n<p>In a few months, we will establish if some have had luck (Euromillions is still running) or have understood how to maintain their cash-flow and manage their working capital requirements. \u00a0 TCM collects your receivables in Belgium and more than 100 countries.\u00a0 Please<a href=\"https:\/\/tcm.be\/en\/contact\/\">contact us<\/a>if you wish details.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n","protected":false},"excerpt":{"rendered":"<p>It is too early for statistics on business casualties caused by the COVID-19 pandemic. However, one can be certain that those who will survive are the one\u2019s who can manage their cash-flow. After having defined itscrisis policy, TCM upgraded its management \u201cdash board\u201d to get a more dynamic view of the situation. \u00a0 Crisis impact [&hellip;]<\/p>\n","protected":false},"author":11,"featured_media":7445,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[63],"tags":[],"class_list":["post-71302","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/tcm.be\/en\/wp-json\/wp\/v2\/posts\/71302","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tcm.be\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tcm.be\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tcm.be\/en\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/tcm.be\/en\/wp-json\/wp\/v2\/comments?post=71302"}],"version-history":[{"count":1,"href":"https:\/\/tcm.be\/en\/wp-json\/wp\/v2\/posts\/71302\/revisions"}],"predecessor-version":[{"id":72025,"href":"https:\/\/tcm.be\/en\/wp-json\/wp\/v2\/posts\/71302\/revisions\/72025"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tcm.be\/en\/wp-json\/wp\/v2\/media\/7445"}],"wp:attachment":[{"href":"https:\/\/tcm.be\/en\/wp-json\/wp\/v2\/media?parent=71302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tcm.be\/en\/wp-json\/wp\/v2\/categories?post=71302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tcm.be\/en\/wp-json\/wp\/v2\/tags?post=71302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}