COVID-19: Managing Cashflow

Steps for business owners, self-employed and incorporated professionals to survive a crisis.

  1. Understand Your Cash Flow Picture

    If you are a business owner, big or small, COVID-19 is an awful and unexpected circumstance. Having doors shut by the government, going from a thriving business to one that makes no money overnight.

    Your mind is probably filled with so many worries, including your employees, your rent, your bills, your family and ultimately, your future. Follow this checklist to work through the steps you need to.

    The most urgent is understanding your numbers. This helps you to diagnose your situation. How bad is it and where can we begin if we want to survive?

    What is cash flow? The net amount of cash (or cash equivalent) being transferred into and out of a company. If you are paying rent, that is cash flowing out. If you are selling a service and collecting the revenue, that is cash flowing in. Do you have enough coming in to manage what has to go out?

    COVID-19 means most businesses suddenly have no money coming in, but all the same money going out.


    Here’s a template to help you calculate it. Having a good understanding of these numbers is always important, but especially now.

    Watch this video for a great webinar explaining the numbers behind your business and this video for your cash flow tutorial.

  2. Maximize Money Coming in and Reduce Your Costs

    Now that you know your cash flow numbers, it’s time to make them work for you. What are some areas where you can reduce spending? Which are areas that might help you bring more in? Here are some questions to consider:

    • Evaluate your fixed costs and your variable costs. Fixed means things that absolutely cannot change. For some businesses, the rent still needs to be paid, or for others, employees still need to be paid. Variable costs are items that can change. Maybe you can reduce staff costs, maybe you can change the inventory orders you have etc…Identify the holes Here’s a resource to help. 

    • Collections. Does anybody owe you money for work completed? Which of those can you realistically collect right now? Which ones will not be collected? What is your forecasted revenue based on those questions for the rest of 2020. If you are still able to charge for services, make sure your model gets you paid as fast as possible. Don’t sit on invoices before sending them out. Try to get deposits paid in advance of work. 

    • Who do you need to pay? Are there agreements you can get out of? What are the legal ramifications? Contracts that you were going to serve that you can no longer execute? Supplier orders you can try to cancel or reduce? Rental leases to renegotiate? Address each of these and do your best to eliminate them or negotiate them down. 

    Learn more about the clauses in contracts that might help you renegotiate them in the time of COVID-19. Click here


    For each area above, come up with a list of possible areas to reduce cost or bring in money. Write out the steps and which resources and people will be needed to get this done. Prioritize the list in order of the largest bills and the most likely areas of success. Then get after it!

  3. Apply for Benefits

    There have been many benefits announced, some are already available! The government is doing their best to support businesses to help them in these areas:

    • Money to help you keep paying employees

    • Loans to help you bridge the gap

    • Income for you and other family members who haven’t been paid

    • Measures to help you avoid insolvency

    • Delays on several tax payments and utilities

    • Rental and mortgage deferral options


    Check out these articles and list out all of the benefits that you might be eligible for. Note the dates they become available and create a plan to apply. Be sure your documents are all in order.

    EI/Income supplements

    Mortgage/Rent Deferrals 

    Small businesses and self-employed

    Ultimate Financial Guide to COVID-19

  4. Check Your Insurance to See if You Can Make a Claim

    If you have been forced to shut down, you will likely qualify to make a claim for business interruption insurance. This is only possible if you have a business insurance policy in the first place. If you do, and many businesses do, the most important task is to understand if your policy will pay out in the case of reduced income or closure due to COVID-19.

    Alternatively, many business owners have disability insurance policies either purchased through their businesses or individually owned. Some of these will pay out based on an inability to work due to a pandemic. Each company is different, there is no single set of rules.


    Click here to learn more about how to evaluate your business insurance policy.

    Find your personal disability policy, if you have one, and call your provider to find out if it pays out. 

  5. Finding Low Interest Money to Borrow

    Most businesses are experiencing stress about how to pay bills. The government and other organizations are stepping in with opportunities to borrow money for little or no interest in the short term. This helps tremendously with giving you enough cash flow to make it through this period.

    Remember, everything does need to be paid back. Don’t look at free or cheap borrowed money as a free lunch. Make a plan for how those payments will be made.


    Check out this article for a review of the loans available from the government. If you qualify, await the announcement that they are available.

    Small businesses and self-employed

    Check your bank and other sources of funding you have used, they may be able to extend more or negotiate terms of the money you have already borrowed.

    If your business relies on lots of supplies, inventory or purchase orders, specific funding is available through BDC through their credit availability program. Click here to see a list of remedies each bank is offering.