While I am sure all of you, like I, are tired of hearing about Covid-19 and how it impacted our lives so far. Slowly but surely, common question is becoming, having our lives at health risk, or the alternative of significantly disrupted and damaged economy actually worse to deal with for most of our society? The later is starting to weigh heavy on scales now a days.
Nevertheless, we have some work to do to get back on track. In the last couple of weeks, I have discussed with some clients the strategies of the PPP assistance most of you ended up receiving. The rules to forgiveness are pretty simple, although the congress is trying to make it even simpler if it gets approved at the Senate. You will have to bring back 60% of your employees that you submitted when you applied at the end of (which now about to become) twenty-four weeks period. The other 40% must be spent on specific expenses such as rent, interest, etc. Now the question is, since you have lived through the last eight weeks or so with reduced staff and certain expenses, can you actually live with some of those reductions and how bad did it hurt you during this time? Ordinarily, and without a reason, you would not institute such drastic measures to reduce expenses, but now that you did, do you have to have the same head count and the payroll that you had before the Corona Virus? These are critical assessments at this time since the future is pretty unpredictable, are the factories going to stay open in full capacity? Will there be inventory shortages? Are some of the suppliers in danger of going out of business? Will the pandemic come back later in the year and we start all over again? No one knows. Therefore, having a brand-new strategy considering all the variables is critical. In our last communication we talked about some process changes in order to accommodate economies of scale, multitasking and servicing customers with minimal contact.
On a different topic, and a very frequently forgotten one, you need to go back and pay attention to you balance sheet page of your statements. In order to do it effectively, you must create trend reports since you only see one month at a time. This report will alert you about potential cash shortages, swollen receivables, inventory levels, unusual credit balances, volatile accrual accounts which may also lead to fraud and unscrupulous practices. More importantly, just looking at it is not enough, you must ask question regarding the unusual changes. You will be surprised how much dead cash might be lying around on your balance sheet that with a little effort, you might bring back to life.
At a time like this, you must be a scholar of monitoring dead time and overtime, especially for productive employees. Do you have measuring tools for shop and technician efficiencies? Do you send people home when they are just standing around? All of the other service industries do… Have you instituted a personal production accountability measure at your stores? Do your productive people know quantitatively what they are expected of? All those things that we neglected, but pretended that we were doing at retail stores, now become a must to survive and actually take advantage and thrive.
At Convergent Alliance, our expertise offer our clients all of these services to streamline you operations, prevent or identify cash shortages, free up cash and also do forensic work to identify, theft, malpractice or plain ignorance in you operations from your business office to every level of management. Our signature workshops address all of these topics to energize your team and provide tools to your management staff to become more efficient and effective. Look forward to hearing from you,