A financial perspective on the restart

Mila’s finance director James Kiernan offers some guidance on one of the biggest concerns following lockdown: finances.

The main thing for customers at this stage is to make sure that they have accessed all of the government support available, from the Coronavirus Job Retention Scheme to business interruption loans and business rate relief grants.

These can preserve much-needed working capital to help them get through the lockdown and eventually ease their way back into production. Anyone who is struggling with that can contact the finance team at Mila and we can signpost them to the most useful sources of funding.

Companies that have already furloughed their staff under the government’s scheme have been able to cut costs and retain capacity and skills of course, but the challenge for them now is how and when to bring those people back into the business and balance safety, resources and demand.

With furloughing only possible in three week blocks, businesses have to be able to accurately predict demand, which will mean talking to customers well in advance to understand the scale of that. They also need to consider un-furloughing non-production staff in areas such as sales, marketing and finance who can make an immediate impact on the bottom line.

In fact, the most important thing that all businesses can do is open a dialogue with staff, customers and suppliers at an early stage in exactly the way that Mila has done. Businesses need to understand what the demand will be, but also whether they will be able to get the components they need to be able to meet that.

And, of course, they need to talk to both customers and suppliers about payment terms. The industry will only be able to get back on its feet if cash keeps flowing, and agreeing in advance when you will get paid and when you will make payment will be crucial.

With the latest lockdown restrictions set to be reviewed shortly and the government’s Job Retention Scheme only running until the end of June, planning and decisions have to be made now about how the wider industry will eventually get back to work.

The emphasis of course will be on reducing costs, maximising margins, and building up reserves, and Mila will be standing alongside our customers to help them to achieve that.”

Mila’s Customer Accounts team is headed up by Lorraine Spokes. The team are currently working remotely but customers can talk to them directly on: 07801 456677. More at www.mila.co.uk