A majority of the enterprises (90%+) that participated in the survey had a very negative outlook about their Organizational liquidity and Accounts Receivable. And these opinions stem from the facts that are:
1. Limitations on the short-term debt availability within the economy, that can be consumed by
2. Increased uncertainties in their accounts receivables due to collapses in incomes
What’s more – companies may not be able to issue/utilize commercial papers in the coming months due to the lack of liquid assets present within the company, since most of the funds are being utilized for their working capital management.
A representation of the outlook that the respondents had against the various aspects of Treasury
The only positive element however within this entire outlook is the federal reserve’s initiative to induce liquidity by pumping in money market funds, which are claimed to bring in relief amidst the crisis.
The respondents surveyed have also cited that the possibility of COVID’s inflection point can be reached within 1-2 months, and the state of financial normalcy can be expected 6 months from now.
Suggesting that companies will not readily have access to lines of credit from banks and may not be ready to make any newer investments until the beginning of the last financial quarter, because practically that will be the time for markets to pick up.
A Projected Timeline of Health & Financial Inflection
Enterprises so far have been operationally able to withstand the impact of COVID-19. They did so by having strong business continuity plans set in place, and by adhering to staff safety protocols through remote working.
However, how lasting can BCP models remain is the question since most of them have been only designed to sustain a 2 week remote operation period. What’s more, less than 20% of the respondents cited that their current Business Continuity Plans are also less adapted to their payment security processes, thereby showcasing the first of many challenges that will eventually spring up as the BCPs continue.
This concludes the key findings from the first survey conducted and is also a beginning to many survey insights that are due to be released. The next set of insights is available Visit our Blog
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