b'ACCOUNTING COLUMNCASH FLOW MANAGEMENT STRATEGIES FOR TODAYS CONSTRUCTION INDUSTRYBY BRIAN LAVECK, MNP iven the current situation in thenot personally guaranteed the debt, yourCASH FLOW MANAGEMENT TIPSG construction industry, many arebusiness may be able to default withThere are some strategies to create a better wondering what they should beminimal effects on your personal finances. cash flow in your business:doing with their cash in the bank. Among the most frequent questions clients ask meIf you were to priority-rank your creditors,1. Understand your cash flow needs.is, Who do I pay first? Lets take a closerthe Canada Revenue Agency (CRA) look at who should have priority and why,should be near the top of your list. TheUsing your forecasts and a13-week as well as the effects of major equipmentCRA has the authority to freeze yourrunning cashflow template (download at purchases on cash flow and some tips onaccounts and withdraw funds. They willmnp.ca/en/covid-19)as a guide, prepare managing your cash flow. not ask before doing so and can createweekly cash flow forecasts for at least the serious cash flow issues if youre behindnext three to eight months. This will help WHO SHOULD I PAY FIRST? on payments. They can also direct youryou determine how long your business can When cash is tight, your priority is to keepcustomers to pay any outstanding debts orcontinue without burning through your the jobs goingwithout that, your cashinvoices to the CRA directly. working capital.flow ceases. Most contractors know youAlso, the CRA considers certain debts,Now you need to focus on strengthening need to pay for labour and materials first.such as GST and payroll remittances,cash flow.You also need to know whichto be money held in trust for the commitments youve personally guaranteedgovernment. These debts may have to be2. Develop key supplier and customer and the impact of business debts shouldassumed by directors if a business defaultsengagement strategies.you default. If youve personally guaranteedon remittances. You need to treat these the a defaulted debt, youll be required tosame as the big three business expensesIdentify all the customers and vendors cover it with personal assets. If you havementioned above. who represent critical accounts. Reach out General Contracting Industrial CommercialProudly Serving the Kootenays since 199428 SOUTHERN INTERIOR CONSTRUCTION ASSOCIATION'