As part of your business continuity plan, assess your cash flow, credit, and finances to ensure the recovery and resilience of your enterprise.

The COVID-19 pandemic and subsequent lockdown has caused disruption to varying degrees for most businesses. In such a situation it is important for businesses to take stock and create a business continuity plan. Assessing cash flow, credit and finances are a major component of this plan to ensure recovery and resilience of a business.

Here are some immediate action points for your business continuity plan:

• Assess your cash flow for the next 6 months (assume that only 30% of this is going to come)
•  Assess your payables for the next 6 months.
• Will the inflow be enough to manage the outflow without dipping into the cash credit facility? If not, will you have to dip into reserves?
• Segregate the essentials and the non-essentials.
• Address all the large creditors in a positive manner. Speak to them and ensure that 30% will be paid to manage their essentials while the rest will be staggered.
• The suppliers should ideally be addressed positively as they are required to be continuously in good shape. But it takes two hands to clap and hence they should also understand the situation.
• Address the small creditors (both in terms of amount and their independent size) and see if you can pay them in full because they will be most affected.
• All the daily wages staff (contractual) should be positively addressed as these are the people who can be completely submerged. But if you can help them sail, it will generate trust and immense goodwill.
• This is a time when the whole industry should speak to each other and manage the same. Please speak to your bankers and ensure that they don’t put too much pressure on churning.

FAQ

What is a business continuity plan (BCP)?

A business continuity plan is a documented strategy that helps an organization maintain or quickly resume its critical operations during disruptions, showing exactly how to build a continuity plan that protects assets, people, and processes.

Why is a BCP important for organizations?

Organizations that take time to create business continuity plan are better able to reduce downtime, safeguard customer trust, meet regulatory obligations, and minimize financial losses when crises hit, making continuity planning steps essential for resilience.

What are the key steps in creating a BCP?

The business continuity planning steps include assessing risks and impact, defining recovery time and point objectives, drafting roles and responsibilities, designing recovery strategies, then testing and revising the plan to maintain readiness.

How do companies test their continuity plans?

Companies regularly conduct drills, tabletop exercises, simulations, or full-scale mock disruptions to validate their plan, evaluate gaps, train employees, and ensure that their procedures for recovery are effective in how to build a continuity plan under pressure.

What risks are covered in a BCP?

A robust BCP addresses a spectrum of risks, natural disasters, cyberattacks, supply chain failures, power outages, IT system failures, human error—covering likely and high-impact threats to ensure the plan’s scope when you create business continuity plan includes all relevant scenarios.