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Items in orange you should “do now”, items in yellow, “do next” and items in green should be done as needed and applicable.
- Regularly monitor up-to-date information from the South Australian Government.
- Understand and review all measures available to small and medium businesses, small traders and households under the Australian Government’s measures:
- Small or medium businesses with reduced cash flow
- Temporary relief for financially distressed businesses
- Australian Government measures to assist economic recovery
- Cash flow assistance for business
- Sole traders who have lost business
- Review up-to-date information from the Australian Taxation Office (ATO).
- All NGOs should carefully consider their financial position throughout this pandemic including cash flow and liquidity management
- The basic purpose of doing this forecasting is to identify circumstances when cash outflows may exceed cash inflows and therefore to anticipate the need for a remedial action ahead of time.
- Grant funded organisations can rely on their grant funding to continue as expected. If you require any relaxation of the rules on what the funds can be spent on, please contact your funding contact immediately.
- Based on the result of your scenario planning (refer section 3 above), your short, medium and long term funding income and/or expenses may be impacted.
- We recommend that you perform a detailed rolling cash flow forecast to understand how each scenario may affect your financial position.
- We have provided a simple weekly forecast template as well as a more comprehensive monthly cash flow template.
Cash flow forecast example - weekly (XLSX 600.7 KB)
Cash flow forecast example - monthly (XLSX 19.5 KB)
- If your income is negatively impacted, you need to consider:
- the re-prioritisation of spending and financial obligations
- what opportunities are there to accelerate cash collection/generation.
- Identify potential triggers for urgent action (e.g. liquidity issues) - monitor these frequently and carefully.
- Consider the need to factor additional costs (e.g. employee entitlements) into the cash flow forecasting if you need to restructure your operations.
- Review any cost changes such as additional cleaning services or locations during this time.
Do as needed
- Consider how your organisation is thinking about:
- the degree of confidence in understanding how the impending cash flow risks will impact the organisation
- The reliability of the ongoing cash flow forecasts
- For organisations receiving grants, the various trigger points that exist within existing financial arrangements, for example any “financial covenants” or other terms in existing contractual arrangements relating to finance.
- How declining earnings affect the value of assets on the balance sheet and how this impacts any financing arrangements you may have in place.
- Do you have an accurate understanding of your working capital (i.e. current assets minus the current liabilities) needs and timing of payments?
- Have you stress tested your cash flows (by applying a range of assumptions to each scenario) and do you understand how much cash you need and for how long?
- Do you have capability and capacity to support and rapidly assess changing forecast scenarios?
- Have you identified costs that can be eliminated / reduced and have plans on how to execute on these?
- Have you assessed the impact of the pandemic on your clients and their ability to pay?
- Have you re-assessed any financing / covenant compliance requirements?
- When do your current banking facilities expire (where applicable) and have you considered your ability to access new credit?
- What is the impact of revised forecasts on your financial statements /asset impairment / going concern requirements?