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Cash flow impacts

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The long-term impacts on your cash flow of short term actions taken during Covid-19

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Cash flow impacts

  1. 1. The long-term impact on cash flow of short-term actions taken during Covid-19 The COVID-19 crisis is rapidly evolving and the Government's response and the details of support on offer are continuously changing. We'll be updating our posts regularly to ensure our analysis and advice remains as accurate and useful as possible. To receive the very latest information as we release it follow us on LinkedIn.
  2. 2. Cash flow considerations 1 The implications of actions taken during Covid-19 2 The impact when borders slowly begin to open up
  3. 3. CBILS Payments falling due end of Q1 2021 Tax deferral VAT to be paid back by 31 March 2021 Furlough Ends in October – what do your staffing needs look like? Refund credit notes What % will convert into new bookings vs refunds? Supplier credit notes & refunds Can you ensure credit notes are used if customers don’t want to travel to the same destination? When will refunds be paid? Actions taken during Covid-19
  4. 4. Impacting cash flows Q1/2 2021 CBILS Tax deferrals Refund credit notes
  5. 5. Impact on cash flow when the world starts opening up Existing bookings New bookings Business model If people are willing to travel this summer balances will be due – positive impact on cash flow but you will also need to pay suppliers Likely to have short lead times with full balances paid upfront – positive impact on cash flow Some destinations will open up before others. Can you sell new products to increase cash flow? Deferred bookings Convert refund credit notes into new bookings where possible to prevent refunds
  6. 6. Cashbalance,£ J F M A M J J A S O N D J F M A A typical summer tour operator pre-Covid-19 Financial help e.g. CBILS taken during Covid-19 & refund credit notes given No financial help taken and customer money being refunded Cash flow scenarios
  7. 7. Summary 1 Think beyond 2020 when preparing your forecast 2 Start to plan now - consider the minimum you need to do to get through the next 12 months 3 Stress test your business using different scenarios
  8. 8. THE TRAVEL TRADE CONSULTANCY www.thettc.co.uk

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