A senior Republic Bank executive says the bank is cognizant of businesses’ increasing fear about their survival since COVID-19 hit.
And in a recent Republic Bank Group webinar addressing some of the issues confronting businesses since the pandemic, general manager of Republic Bank Guyana, Parbatie Khan, said in the current environment of high unemployment and slowed business activity, ensuring cash level are maintained will be important to the survival of businesses.
Acknowledging that businesses operate in an environment of uncertainty and must have the financial strength to achieve their goals and execute their plans and strategies in order to survive and take your business forward and succeed, she said: “Whether you are serving a small community clientele, having one contract, or you are exporting, or have several business lines behind you, you need now to manage your liquidity.
“It is your cash or your access to cash that will keep your business afloat to be able to ride through this wave and carry your business through to ride through for the longer term. We have heard the phrase ‘cash is king’; you must recognize now that your cash or your access to cash is the lifeblood on which your business depends to get you through these times. And you need to know what is your business cycle.”
Khan also told participants it will be important to reduce the time it takes buying raw material, getting it delivered to the business, manufacturing the goods, holding the inventory, finding the customer to sell it to, delivering to customers and collecting on the payment.
“In between all of that, you also have to make payments. You have got to pay your employees, pay suppliers and manage utilities. That is your cash operating cycle. As a business owner you need to know what is that timeframe that will convert from when you pay for your raw material all the way back to when you get the cash from the sale of the product,” the senior banker said.
“And the smaller that you can keep that cycle, the shorter the number of days, the faster you begin to turnaround on cash, the greater the availability of cash to use in your business and the less you need to borrow and depend on external financing and profitability for your business.”
Stressing that the way business was conducted across the region had changed dramatically since last March, Khan said: “The uncertainties created by this pandemic have shifted the curve of how we do business . . . . Some have experienced changes in small ways, managing social distancing, and implementing sanitization processes. Others have had major shifts, from the customer side of business, to their suppliers, delivery channels and managing their workforce and rationalizing their cash flows.”
According to Khan, Republic Bank was also operating in the same hostile environment and “recognized immediately the need to proactively support our customers and the business community to work with you through these disruptions”. (IMC1)