To keep your business solvent through the COVID-19 pandemic, stay focused on the 3 rules of cash:
1) Now versus later. Cash now is better than cash later.
Decreasing cash flow for many of your customers means you’ll likely have trouble collecting 100% of your accounts receivable in the short term. But don’t overlook clients whose cash flow or revenue has yet to be dramatically affected by the pandemic or who have a big enough emergency fund to pay most of their bills for several months.
What to do now: Be compassionate, but don’t stop your A/R collection efforts. You need as much cash as possible now, not later. You likely have some customers who can still pay your invoices. So actively communicate with key customers and consider offering slightly better terms to receive payments earlier than normal. Also look to suppliers to extend payment terms with them. By working together, you can find unlikely partners to help you both through this hardship.
2) More versus less. More cash is better than less cash.
It is important to build your cash reserves now more than ever. While difficult after the pandemic hits your business, it is not impossible. Review every asset on your balance sheet – accounts receivable, prepaid expenses, fixed assets, and inventory. Determine what it would take to convert each of them to cash.
What to do now: Consider leveraging these assets with your bank as a line of credit. Also talk to your lenders about the possibility to postpone several months of loan payments. Perhaps your bank will take interest only payments. Ask suppliers who will give you discounts for paying on time during the pandemic. Get involved in your bill paying process and pay bills on time, never early. And think long-term, any ideas to build up your cash now will only help later.
3) NEVER zero. Don’t run out of cash.
According to a 2019 survey by The Service Corps of Retired Executives, 82% of small businesses that eventually fail do so because they run out of money. So it is critical to constantly forecast your business’s worst-case scenario and figure out how much cash you need to keep your doors open. Then take steps to protect your business before you run out of cash.
What to do now: Start by prioritizing your business’s expenses. Know who you have to pay and who can be delayed. Identify expenses you can cut and in what order they should be cut. Use your forecast as an early warning system to determine when to start these cuts, if you haven't already done so.
These simple cash principals are timeless, but the pandemic reminds all businesses that you need to have a sharp focus on your cash position. By keeping these ideas top of mind, you may be able to meet your goal: Have enough cash to keep your doors open and stay solvent.
Last updated: 07/05/2022
This Site and the Mostad Cloud Services content are intended for customers of Mostad Cloud Services. You may not use this Site or any of the content for any purpose not related to your business with Mostad Cloud Services. You are specifically prohibited from: (a) downloading, copying, or re-transmitting any or all of the Site or the content without, or in violation of, a written license or agreement with Mostad Cloud Services; (b) using any data mining, robots or similar data gathering or extraction methods; (c) manipulating or otherwise displaying the Site or the content by using navigational technology, framing, or similar technology; and (d) using the Site or the content other than for its intended purpose. Such unauthorized use may also violate applicable laws including but without limitation to copyright and trademark laws, the laws of privacy and publicity, and applicable communications regulations and statutes.
You represent and warrant that you will comply with all applicable laws and regulations, including, without limitation, those relating to the Internet, data, e-mail, privacy, and the transmission of technical data exported from the United States or the country in which you reside.
You acknowledge and agree that all content and information on the Site is protected by proprietary rights and laws.
You agree not to modify, copy, distribute, transmit, display, perform, reproduce, publish, license, transfer, create derivate work from, sell or re-sell any content or information obtained from or through the Site.
The Site may contain links to other websites maintained by third-parties. These links are provided solely as a convenience and does not imply endorsement of, or association with, the party by your accountant, your tax professional, or Mostad Cloud Services or its affiliates
Mostad Cloud Services reserves the right to change or modify any of the terms and conditions contained in this Agreement at any time. You acknowledge and agree that it is your responsibility to review the Site and these Terms of Service from time to time. Your continued use of the Site after such modifications to this Agreement will constitute acknowledgment of the modified Terms of Service and agreement to abide and be bound by the modified Terms of Service.
Mostad Cloud Services shall have the right to immediately terminate or suspend, at its discretion, your access to all or part of the Site with or without notice for any reason.
You expressly agree that use of the Site is at your sole risk and discretion. The Site and all content and other information contained on the Site is provided on an "AS IS" and "AS AVAILABLE" basis without warranty of any kind, whether express or implied. Mostad Cloud Services makes no warranty that (I) the Site and content or information will be uninterrupted, timely, secure or error-free, (II) the results that may be obtained from use of this Site will be effective, accurate or reliable. The Site may include technical mistakes, inaccuracies or typographical errors. Mostad Cloud Services reserves the right to change the Site content and information at any time without notice.
In no event shall Mostad Cloud Services or its affiliates be liable for any indirect, incidental, special, punitive damages or consequential damages of any kind, or any damages whatsoever arising out of or related to your use of the Site, the content and other information obtained therein.
Certain jurisdictions prohibit the exclusion or limitation of liability for consequential or incidental damages, thus the above limitations may not apply to you.
At Mostad Cloud Services, we respect the intellectual property rights of others and expect our users to do the same. Our Terms prohibit users from violating someone else’s intellectual property rights, including copyright and trademark.
If you believe content that belongs to you is being used through our Services or Websites without your permission, we want to know about it. You can send notice of the alleged infringement to our designated agent:
If you do send us a notice, please note that we may forward your notice, including your contact information, to the user who posted or used the content that you are complaining about. If you're not sure whether content on one of our Websites or sent through our Service infringes your intellectual rights, then you may want to speak with legal counsel in your area before notifying us.
Finally, before sending us a notice you may want to reach out to the person or organization who posted or used the content you believe infringes your rights. You may be able to resolve the issue directly with that person or organization without contacting Mostad Cloud Services.
When reporting a claim of copyright infringement, please ensure your notice includes the following:
When reporting a claim of trademark infringement, please ensure your notice includes the following:
This agreement was last updated on April 20, 2020.
You can contact Mostad Cloud Services with any questions at
9655 Penn Ave S
Minneapolis, MN 55431
Call us at 800.888.5803