Report: How can Saudi firms tide over cash flow stress amid COVID-19?
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Companies in Saudi Arabia are likely to face operating cash flow challenges in the short term due to the COVID-19 pandemic, consultancy firm KPMG Saudi Arabia said in a recent report titled “Improving Cash & Working Capital Management”.
A robust level of preparedness and proactive response can help businesses navigate through these unprecedented times, said Fuad Chapra, Head of Family Business at KPMG in Saudi Arabia.
“Companies should consider working capital needs in the context of overall business requirements for weeks, months and foreseeable future ahead,” he noted.
In addition, the consultancy recommended companies to avoid tying up cash in unproductive inventory and review trapped and illiquid cash within the group structure.
Companies need to think strategically by making cash management a boardroom priority, said Chapra.
“Gaining visibility and control of cash flow, and optimizing working capital can help a company to provide a buffer against unexpected market shocks and release cash to deal with rising costs,” he concluded.