Covid-19 Cash Flow Optimization
Has your dealership thrived through hard times?
Though it has been a hard year for everyone, the car business did not seem to struggle during the pandemic. If anything, it generated numbers and profits higher than it ever has been. In hard times like this, it is still important to take away key insights and preparations for keeping your business success afloat.
Here are some key ways to maximize cash flow while having a business crisis management plan:
- Keep track of your expenses and where you can save money. Monitor, strategize, reduce costs, and reduce your break even point and cost structure. Prioritize your bills, see which can be deferred, and apply for any business grants/loans if necessary.
- Suspend curtailments and see if interest payments can be deferred.
- Maximize cash by floor planning new cars and allowable used inventory.
- Apply for an increase on labor and parts that are under warranty through the reimbursement rate.
- Communicate with the manufacturer on restrictions, returns, and deadlines.
- Review receivables to increase cash flow, minimize balances throughout all of your accounts.
We are in a better place then we were a year ago as we understand more of this pandemic. While we don’t know what happens next, it is important for dealerships to be optimistic and prepared. Practicing financial strategies and taking action now will help avoid any major setbacks!
References:
Cash flow optimization for auto dealerships during covid-19 crisis. (2020, May 18). Retrieved April 01, 2021, from https://www.withum.com/resources/cash-flow-optimization-for-auto-dealerships-during-covid-19-crisis/