Liquidity under pressure
The revenue lost by businesses during the COVID-19 crisis represents a permanent loss and is putting sudden, unanticipated pressure on liquidity. Many businesses across a multitude of sectors are finding that they need to approach their suppliers, customers, and financiers to arrange short term solutions to support their cash flows. This article identifies why companies may experience cash flow issues and what actions they can take to address short term working capital requirements.
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In this piece, Deloitte Global examines the outbreak of COVID-19 and the uncertainties that it has brought to economies worldwide, including cash flow and financing pressure and business continuity issues facing companies, especially small and medium enterprises and those in such industries as transportation and hospitality.
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During the COVID-19 crisis it is vital for boards and key management to develop and implement strategies to facilitate information flow within their organisations. This is to empower informed decision-making, compliance with rules and regulations, and effective stakeholder management.
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It is clear that finance functions will need to quickly adapt to the direct and indirect impacts of COVID-19. This is specifically relevant from a financial reporting perspective, with challenges mounting related to immediate reporting requirements. This article discusses how COVID-19 is affecting financial accounting and reporting, the capacity of the finance function, cash flow reporting, and stakeholder reporting.
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