Preparing a Business Optim-20 Plan
Donald J. Sauder, CPA | CVA
Watching current and continued developments with the Coronavirus Pandemic? Begin early to prepare for a potentially prolonged economic recovery. The implications of the disruptions to business cash flows, revenue, and market declines highlight the importance of appropriate strategic business plans.
Many businesses are experiencing new challenges on a surprising frontier, and a comparison may be to embarking on a financial “Ernest Shackleton expedition.”
Cash is king. Planning to maintain liquidity levels should be top of mind. Remember, though, that cost reduction measures in aggregate, will lead to a longer economic recovery because of the shift to a slower velocity of money.
Prepare for challenges in supply chains, slower payments on accounts receivable, changes in confidence, or potential defaults. These cash implications will have a ripple effect on the economic domino chain of interdependent business.
Special payment relief is now available to individuals and businesses in response to the Coronavirus Pandemic. The filing deadline for tax returns remains April 15, 2020. The IRS urges taxpayers who are owed a refund to file as quickly as possible. For those who can’t file by the April 15, 2020 deadline, the IRS reminds individual taxpayers that everyone is eligible to request a six-month extension to file their return.
Income tax payment deadlines for individual returns, with a due date of April 15, 2020, are being automatically extended until July 15, 2020, for up to $1 million of their 2019 tax due. This payment relief applies to all individual returns, including self-employed individuals, and all entities other than C-Corporations, such as trusts or estates. IRS will automatically provide this relief to taxpayers.
If you sense that you will need relief from secured or unsecured creditors, begin discussions before the cash need is critical. Prepare a cash flow analysis of why your creditors should see that your business cash flow risks make sense.
A genuine business expedition is before us. Cash will be king. The greed of yesterday may turn to fear. We are working in uncharted territory. The wisdom of your Guide will be crucial from today forward.