Receivables as a mission-critical cash source
With almost all major economies of the world coming to a
standstill due to stringent lockdown and social-distancing
measures, most organizations are reeling for cash. The tremors of
disruption have been felt across supply chains, and the retail
sales for certain sectors are down to almost zero. Consequently,
most firms are cutting down non-critical expenses like research and
development, capex, and more. For MSMEs (Medium, Small & Micro
Enterprises) already facing a severe cash crunch, this condition is
aggravated by the unwillingness of banks to lend to
"non-reputed" firms during these times of crisis.
No inflow of cash, alongside still, fixed costs going out in of
the form of employee expenses, rentals, plant, and equipment
maintenance, has necessitated an aggressive approach towards
receivables. This approach is a must for firms to manage a healthy
working capital as they tide over this crisis.
