CIANJ Commerce Magazine June 2020 | Page 28

■ Accounting
Continued From Page 24
ness owners should immediately try to reduce
variable costs. They should think about the expenses
they can survive without and cut those
first. They can also work with suppliers to agree
on payment terms on invoices that the company
may owe. Finally, inventory management is crucial.
Have on hand what is necessary, but keep
in mind that supply chains are most likely interrupted
by the pandemic as well.
Mazars USA LLP
By Jason Pourakis,
CPA, Partner
Mazars USA is focusing on a
maximum of 13 weeks of cash
flow, to be readdressed and reestablished
after each 13-week period.
This is essential to be agile and respond to
this constantly changing crisis. Cash Flow analysis
should be a simplistic approach of cash inflows
and cash outflows. The one constant is the
revenue (or reduction of revenue) that you must
model your expenses against. When analyzing
the expenses, the expense should be further broken
out between essential payments and non-essential
payments. As the cash flow is modeled
out, we are advising clients to request extension
of pay terms on debt, deferral of insurances for
trucks or plants not in operation, and completely
scrubbing through the P&L to stop or greatly
reduce services that are non-essential in order to
be successful coming out of COVID.
MSPC
By Michael J. Halkias,
CPA, Partner
Many companies have experienced
a double whammy during
the crisis of tighter credit terms
from vendors and slower payments
from customers. Although every company
is different, some general advice applies
to everyone: review vendor relationships; be
upfront with your bankers; proactively seek out
aid from governmental programs for which you
qualify; defer unnecessary expenditures; and reassess
credit terms offered to clients. The only
element of cash flow that a company can truly
control is cash disbursements. Although some
try to improve cash by delaying payments on
overdue invoices, it is often a better strategy
to negotiate discounts for prompt payment. It
may even be more beneficial to pay on delivery if
you are able to receive enough of a discount or
preferential delivery terms.
Withum
By William R. Hagaman, Jr.,
CPA, CGMA,
Managing Partner, CEO
During these uncertain times,
we are advising clients on ways to
manage through the disruption
of normal business activity. Actionable recommendations
to address immediately cash-flow
issues include an intentional effort to conserve
cash by cutting or delaying non-essential expenses
such as travel, entertainment and (some)
marketing. Plan for varying lengths of time of
reduced revenue flow and speak with your bank
about increasing lines of credit to use as a safety
net during a time of cash-crunch. Related to
supply chain interruption, look for alternate
sourcing beyond your current vendors if they
are unable to deliver goods at this time. Also
look to extend payment terms with vendors,
only done with transparent discussions between
both parties.
Medical Grants for Children
The UnitedHealthcare Children’s Foundation (UHCCF) is a
501(c)(3) charity that provides medical grants, up to $5,000,
to children who have medical needs not covered, or not fully
covered, by a commercial health insurance plan. Grants help
families pay for medical services and equipment such as physical,
occupational and speech therapy, counseling services, surgeries,
prescriptions, wheelchairs, orthotics, eyeglasses and hearing aids.
Parents or legal guardians may apply for grants at
www.uhccf.org, and there is no application deadline.
©2012 United HealthCare Services, Inc.
UHCEW576562-000