MONEY TALK: Management of cash flow: alternatives to minimize the crisis effects by Jefferson Gonçalves

Management of cash flow: alternatives to minimize the crisis effects


An efficient cash flow management is imperative in the current crisis

In recent months, businesses of all sizes have faced the need to reevaluate their business model.. Cash flow management has become more important than ever as it may deal with a very survival of an enterprise.


Benefits of cash flow management

Cash flow is a basic but a very important financial planning tool. Many factors must be considered in implementing it: the origin and disposition of available funds which dictate possible elimination of expenses and nature of investments.
The trick is to successfully assess cash and working capital and estimate an enterprise’s  liquidity level.

A realistic assessment of the available working capital and the liquidity level of a company is important to support the decision making process.


Predictability of cash flow in an environment of uncertainty.

In any business cycle, currently made worse by the public health emergency, improving cash flow management by developing processes and methods that define and solve immediate issues becomes even more important and urgent.

The challenge is to establish indicators related to future cash flow forecasting that are able to demonstrate the ability to meet obligations ahead.


Analysis of revenues and costs

Understanding sources of revenues and nature of expenses highlights the importance of alligning all information systems. Based on all indicators, coupled with the lessons learned during the pandemic, this should become the “modus operandi” of every business.

Efforts to reduce costs must be considered as they do not bring immediate results. Every reduction needs to be planned and its consequences well evaluated.

These are some of the areas to be considered:

  • Negotiation of deadlines with suppliers, lessors, and financial institutions;
  • Review of all contracts; replacement of suppliers;
  • Full use of government measures dealing with labor and taxes;
  • Adoption of a degree of “work from home” policy which may reduce costs significantly.

It is crucial to create ways to periodically evaluate the variables and changes in the situation, external effects and the results of actions already established.

Beyond cash flow

An efficient cash flow management is not restricted to recording inflows and outflows. It is essential to coordinate this information with micro and macro analysis:

  • Management of bank accounts, accounts payable, receivable, investments, budgets
  • Account reconciliation;

Financial managers should be supplied with reports containing reliable data. Only with finances under control and understood, a company will have the management systems enabling it to successfully plan for short, medium and long-term actions.

Complete business support solutions

Cash flow management should be entrusted to specialists. Domingues e Pinho Contadores (“DPC”) has a team ready to support companies in this work requiring technical knowledge, tracking trends in the financial market and the legislative outlook.

DPC has expertise to conduct this assessment going beyond the financial management, promoting a comprehensive survey for an improved monitoring and vision of the business, proposing complementary solutions in the accounting, tax and labor scopes from the integrated performance of its up-to-date and multidisciplinary team.

Jefferson Gonçalves – Partner and Financial Management Manager at Domingues e Pinho Contadores


Domingues e Pinho Contadores


Tel: 55 21 3231-3700