Many organizations are faced with revenue concerns as the COVID-19 pandemic continues. It is critical to identify cash-flow exposures and to limit the severity of the risk. Due to the nature of the current crisis, assessments and prioritization of expenses should be done on a consistent basis. Budget adjustments are critical to operations and can be implemented quickly, as changes to revenue and organizational needs develop.
Interpret On-Going Expenditures
The key to meeting the pandemic head-on is to look ahead. While non-profits are skilled at planful budget management, this situation presents an array of new challenges. Particularly, there is a need to continually parse budget items to see where costs can be reduced. As seen in the research on COVID-19 non-profit revenues, reducing insurance costs can be one way of effectively trimming expenses.
Develop A Risk Plan
Another important management task is to take a risk plan. It is imperative to monitor changes with income inflows and outflows. Some expenses can be delayed, but fixed costs become a concern as revenue tightens. Organizations can determine effective controls by having an evolving idea of where cuts can occur to minimize changes to daily functions.
Non-profits have a unique difficulty in managing budget issues during COVID-19. It’s important to consistently address financial risk, along with a plan to secure the bottom line.