elEVAte: Assisting Companies to Navigate through COVID 19

G T Kannan,Founder & CEO

G T Kannan

Founder & CEO

During this COVID 19 recovery stage and phase lifting of lock down, there is great stress for various industries to restart its operation and to regain confidence of managing financial constraints. I would like to share my thought, how elEVAte can ELEVATE you from this crises situation. The company has built bandwidth to handle the situation as it has experienced professionals for the same.

It is for sure economy will bounce back with tremendous strength. Appreciate the Govt. timely proactive action to help through the situation by giving relaxation on statutory compliance and deferment of financial commitments beside several other relaxations. For these efforts by Government, the response from corporate world is generally “Inadequate” or “More to do”. It is high time that we can think How “U” could make change to turnaround situation along with economy stimulus package from Govt and other institutions.

I am sensing, COVID 19 could be very stressful situation once again to MSME companies, as most of the companies will run out of cash after 2-3 months for an operation. COVID 19 is additional Challenge to small Industries continued with Demonetization, GST Implementation, Mounting default cases, Global slowdown, Investment declain in Real Estate, Plummeting domestic automobiles etc.

The speed of recovery will be good for sure. It happens fast when we fall. We can put worst behind and best is ahead of us.

elEVAte can put the systems in place, after our assessment by understanding the challenges faced by the company due to COVID 19

The challenges in this situation could be like Cash flow visibility, Demand Certainty, Govt Financial Stimulus package adequacy and time period to look up and for tax optimization strategy thinking. The last but lease is that, how much fund required to bring back to normalcy.

• The fact remains, MSME companies are going to be hard hit, Further, it is also the fact, Large companies cannot survive without MSME support. So is important how the attitude of the bankers and other lending institution going to act in this situation. There
is need to give aggressive support to the MSME’s to overcome the liquidity crunch at least for next 6 month. I strongly believe that, financial institutions were flushed with fund but adequate funds were note reaching to MSME’s. Now these lending institutions have to revisit to support small and medium companies which have potential to grow. Few of the norms for lending need to be relaxed by the FI’s.

• Further, Govt to explore reducing GST rates and Corporate tax rates which will give a breather to boost MSME. This will be way forward at least for next 1-2 years to restore economy.

• The Firm /Companies should restrict discretionary spend like Advertisement, Marketing & Diversification etc to ensure that it is not affecting business.

• The Firms/ Companies required to concentrate on cost rationalization. Like converting fixed to variable for better optimization. So keep focus on reducing breakeven point at low level as much as possible

• Look for only short term and medium term plan. Keep long term investment plan aside at least for six month.

• MSME Units Undertaking Projects of large PSU’s should necessarily fund MSME units every stage by giving more advance payment during Project execution period, largely for the reason that MSME units are cash trapped in executing the project.

• Presently MSME units faces liquidly crunch on account of delayed realization by large PSU’s. PSU’s s should clear all dues as per terms to ensure that MSME working capital is not blocked.

• The company has to focus on restructuring the organization for effective utilization of Manpower for better sustainability.

• Monetize all your liquid assets which are blocking in working capital.

• The companies need to be focused on cost items and cash items to get over this situation at least for 6 months.

Though our CFO Scope address the following areas in general, with given situation, we can take following areas as priority to overcome current situation.

• To tide over situation, elEVAte can help you to co-ordinate with Financial institutions to reassess the working capital requirement for enhancement . We will coordinate with lender to revisit interest rate reduction to ensure that the firm /company takes maximum benefit from financial assistance package provided by the Govt.

• We, elEVAte can put the systems in place, after our assessment by understanding the challenges faced by the company due to COVID 19, to ensure that you will normalize the situation as soon as possible.

• elEVAte can help you for proper management review systems ultimately leading to stability and its growth both top line and bottom line.

• elEVAte will do critical analysis for fixed and variable cost and balance accordingly so as to justify expenses are linked to revenue generation.

• Help you for organization restructuring to make use of the effective people keeping market situation in mind for next 3-4 months

• We can take care of implementing all cost reduction programme identified by us

• Good Planning is always successful factor to get rid of complex situation. We will Take stock of the situation by studying your balance sheet & Business complexity to find the way forward for achieving the objectives of the company.