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How can companies can save themselves from getting bankrupt in Covid-19

by Ashutosh Aggarwal (Consultant Taxlegit.com)
May 19, 2021
How can companies can save themselves from getting bankrupt in Covid-19, Knowledge, KonexioNetwork.com

As we know, Due to Covd-19, most of the Companies are struggling to stay afloat in market.  Due to lack of inflow of funds, many businesses have been come at the edge of shut down, which results in slow down of economy. Small business is the most affected entity in coronavirus because their most of the Transaction is in cash.

In order to avoid bankruptcy and survive in this pandemic, Companies can adopt the following measure.

1)  Outstanding Receivables:   Firstly, Companies should reach out to that Customer, against whom amount is pending to be received. If in case, your Customer business is in good position then   you can ask for Prepayment also.

2)  Avoid Unnecessary expenses:  By eliminating unnecessary expenses, you can maintain funds reserve for future Challenges.  there are following expenses which you can avoid now

  • Expensive Phone plan
  • Infrastructure Cost
  • Events 
  • Gym Expenses of Employees etc.

3)  Debts prioritizing:   Debts prioritizing is also another factor, in order to survive the business, if debts will be prioritized diligently. In the list of debts, taxes which are paid to Government should be come at the top of list. Secondly the salary payment of employees and afterwards any bill which is overdue more than 60 days.

4)  Avail Government Programs:  Government launched many schemes/programs to help the business in this pandemic, because not only a taxpayer but also government is also affected due to covid-19. The below programs launched by the Government of India in Covid-19

  • Credit Guarantee Trust Fund for Micro & Small Enterprises (CGT SME)
  • Pradhan Mantri Mudra Yojana

5)  Check funds availability:  you should assess the funds availability to tackle the situation. You can make Checklist to assess the Finance such as

  • Does a business have sufficient funds to pay the debt
  • Does business have sufficient cash In case of emergency 
  • Is your business able to pay payroll expenses and other expenses?