Short-Term Cash Flow Strategies to Survive an Immediate Crisis

Considering the current economic situation, many business owners have found themselves in a cash-flow crisis, and others may begin to experience it as the effects of massive unemployment flows through the economy.  In this moment of critical need, managing cash flow creatively can be the difference between failure and survival. To address this need, I have put together a list of short-term strategies.

The following strategies are intended to be possibilities to optimize short-term cash flow during crisis situations, but not necessarily during stable environments.  Many involve offering long-term benefits to other larger, more financially stable business relationships in exchange for short-term cash flow benefit for your company.

Risks and rewards should be assessed involving:

  1. Customers
  2. Major suppliers for product materials
  3. Payroll for production or service labor
  4. Corporate payroll
  5. Operating expenses
  6. Loans


Opportunities involving customers should begin with prioritizing sales that can be completed most timely.  This includes ensuring billing is completed in a timely manner.  Collection efforts should prioritize large balances, including large balances delinquent over 30 and 60 days.

Consideration should be given to offer discounts for large balances paid faster than the standard terms.  Further, consideration should be given to offer discounts for new orders and discounts for accelerated payment terms.  It is more important than ever to ensure effective tracking and monitoring of bidding accountability to optimize short-term sales.


Opportunities involving suppliers should begin with negotiating delayed payment dates and/or payment plans to satisfy current payables over several months.  Consideration should be given to offer purchase contracts for longer periods with slower payment terms.  Some suppliers might offer discounts in exchange for long-term purchase contract commitments and/or higher volume commitments.

Payroll for production or service labor:

This may be an optimal time to implement production-based wages.  An e.  This is also a time to prioritize assessing opportunities to consolidate production or service activities to eliminate idle time.  Consideration should be given to furlough employees who are identified as desirable employees to retain when production/service needs resume.  One effective strategy in conjunction with lower wages or furlough positions is to commit – when cash flow has improved – to a year-end bonus, subsequent year wage rate increase, or subsequent year bonus.

Payroll for corporate/administrative support:

Similar to production/service labor, this may be an optimal time to implement lower base salary compensation in conjunction with higher incentive/bonus opportunities.  If sales employees earn a meaningful base salary, consideration could be given to defer all or a portion of sales commissions until year end or on a payment plan when cash flow has improved.  A scenario analysis assessing the trade-off between reducing gross salaries/wages versus eliminating positions is also relevant for corporate/administrative employees.  Consideration should be given to consolidate positions focused on essential short-term activities.  Also similar to production/service labor is considering furloughs for certain employees with an additional option of offering a higher level of PTO time in the future, in addition to future bonus or salary/wage rate commitments.

Operating expenses:

It is critical to identify and eliminate non-essential expenses promptly.  There may also be service providers who will consider slower payment terms or discounts in exchange for renewing contracts for notably longer periods of time.


Companies with existing SBA loans must confirm with their banker how six months of waived payments will be administered.  For all other loans, companies should request deferring three payments being added to the end of the term. In addition, companies should request interest only payments for a period of time necessary to resume stable cash flow.  In some cases, this may be a relevant time to renegotiate existing loans with longer amortization terms.

I hope you find these tips helpful. If I can be of further assistance, please feel free to reach out at 214-402-8315 (office/cell) or



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