KUALA LUMPUR: Having a tight grip on cash management will provide companies with valuable breathing space in times of crisis, such as ripple effects of COVID-19 pandemic, said KPMG Malaysia managing partner Datuk Johan Idris.
This is especially true for small businesses, where having cash on hand makes the difference between being operational or foreclosure.
“In these unprecedented circumstances, businesses must be prepared not only to weather the current storm but also to have the capacity to sail safely back to shore once the seas have calmed.
"Improving cash management is one of the quickest ways for businesses to find some stability during these uncertain times, with an added benefit of reducing debt, funding growth and providing better stakeholder returns,” he said in a statement today.
KPMG said businesses in Malaysia have already voiced their concerns on the impact to their cash flow in complying with the Movement Control Order implemented by the government in March.
According to a recent survey, around 33.3 per cent of small and medium enterprises stated they only have enough cash flow for March, while 37.8 per cent can only sustain up to April 1.
Johan said businesses need to anticipate and prepare to manage its ‘cash squeeze’ and competing cash flow demands.
"This started as a health crisis, which quickly evolved into a global financial crisis at a speed and magnitude we have not seen in our lifetime.
"Having improved visibility via robust cash management and forecasting procedures could be the deciding factor on whether the company comes out of this situation intact,” he added. - BERNAMA
