Possible consequences and courses of action
Currently, coping with the COVID-19 pandemic is one of the biggest challenges for companies. But what are the consequences of the current developments and what are possible steps for companies to take?
Short-term
Companies must expect repeated supply and liquidity shortages, which is why regular crisis assessment is crucial. Proactive liquidity management is also very important to ensure the financial solvency of the company at all times.
The rising unplanned absence of employees due to illness or contact to people infected with COVID-19 is increasingly likely. In order to accommodate their employees, companies should make every effort to offer flexible working time arrangements if possible. It is essential to consult assistance and support programmes offered by the government. Especially, since the loss of parts of a company´s business model can be a consequence of the COVID-19 pandemic.
We are happy to support you with our many years of experience in the areas of restructuring and liquidity support. Within the framework of our Corona support, we have already successfully advised a large number of companies during the crisis.
Medium-term
Businesses must anticipate continuing delays and loss of deliveries, as well as ongoing production disruptions. Losses in sales are also likely due to the impact of the COVID-19 pandemic on many companies in numerous industries.
In addition, firms must prepare themselves for the low payment morale of some customers. This is accompanied by an increasing risk of non-payment. Therefore, it is crucial to optimise the receivables management in order to ensure liquidity in the company. It could be reasonable to make contract adjustments where necessary. This is to ensure that profitable business relationships with customers and suppliers can be maintained despite the challenging circumstances.
Seeking the support of a strategy consultancy like Wagemann + Partner New Consulting to cope with the current situation is advisable. In some cases, even a state subsidy is available for doing so.
Long-term
A significant change in customer behaviour due to the pandemic resulting in the need for a change in the company’s business model is likely for many firms.
Therefore, it makes sense to adapt the company’s business strategy and organisational structure to the new circumstances at an early stage. The risks of how future developments could affect the business should also be included in the process. At Wagemann + Partner New Consulting, we can provide your company with competent support in this area too, as we have many years of experience developing and optimising corporate strategies.
Please do not hesitate to contact us, so that we can support your company during the crisis in the best possible way.
Sources
https://www.gmkonline.de/documents/pandemieplan_teil-i_1510042222_1585228735.pdf page 44