Tue, November 30, 2021


Overcoming cash flow challenges amid the COVID19 pandemic

In today’s environment where the COVID-19 pandemic has caused unprecedented challenges and uncertainty, SMEs’ ability to manage cash flow is even more critical to their business continuity.

Based on the ASEAN SME Transformation Study 2020 by UOB, Accenture and Dun & Bradstreet, in which 1,000 SMEs across ASEAN were surveyed, ensuring cash flow was their top priority in order to weather the impact of COVID-19 and to ensure the survival of their business.


As part of managing their cash flow pressures, ASEAN SMEs are focused on reducing their costs by improving business efficiency through the use of technology (81 per cent), deferring their loan repayments through COVID-19 relief schemes (75 per cent) and renegotiating payment terms or contractual obligations (75 per cent).

Overcoming cash flow challenges amid the COVID19 pandemic

Here are some tips to help SMEs manage cash flow through these uncertain times.

1. Shift the focus from income statements to the balance sheet. It is important to focus on all three elements of working capital – payables, receivables, and inventory – rather than just one of them so as to minimise working capital requirements during challenging times.

2. Sell any obsolete equipment or machinery to obtain an immediate cash injection for your business.

3. Track and manage your invoices. Late payments, which are a typical cause of cash flow problems, could be due to delayed payments by a customer or an ineffective invoicing process. While delayed payments are beyond your control, ensuring a prompt invoicing process within your organisation can help you receive payments faster. It may be time to invest in technology and business solutions to manage administrative tasks such as payroll, accounting, inventory and resourcing. UOB BizSmart, an integrated suite of cloud-based integrated business solutions, is one example small businesses can use to improve their efficiency in this area.

4. Revisit capital investment plans. Given the uncertain situation and cash flow forecasts, SMEs should consider the necessity of their capital investments – those that are essential in the near term or are required to create competitive advantages on the road to recovery. Consider which investments can be postponed or should be considered only when the situation improves.

5. Tap banking partners’ support to relieve financial pressure. To help businesses get through this challenging time, the government and financial institutions have stepped in to offer various COVID-19 relief schemes. We suggest SMEs should approach their banks actively to understand and to obtain the financial support they need, which can range from deferment in loan repayments, renegotiation of contractual obligations and additional loans from financial assistance programmes.

Overcoming cash flow challenges amid the COVID19 pandemic

UOB Thailand is committed to helping our small business customers emerge stronger post- COVID-19. We are actively engaging our SME customers to help ensure that their businesses remain viable during the pandemic through measures such as financial relief programmes and business advisory on digital transformation. In view of the prolonged pandemic and its impact on lives and livelihoods, we will continue to help customers manage business disruption through progressive solutions and to build sustainable businesses for generations to come.

Published : April 28, 2021