Liquidity, Finance & Taxes

Gain clarity, strengthen financial resources

Your expert for questions

Rainer Kroker
Liquidity, Finance & Taxes, PwC Germany
Tel.: +49 30 2636-4407
Email

Securing financial resources and managing the business

What’s important during the acute phase of the crisis: mobilise your resources and keep a close eye on liquidity

The corona pandemic spread rapidly around the world, with consequences that have been threatening the existence of businesses and entire industries. To respond effectively, organisations must quickly and rigorously analyse their financial situation and secure liquidity. What measures can improve financial strength in the short, medium and long term? Which loan guarantees, subsidies and aid programmes are available and how can they be applied for? Companies should use stress tests to challenge their planning assumptions for various scenarios and continuously analyse liquidity with robust, dynamic planning tools. In addition, It’s time to take immediate measures. This includes knowing which instruments are provided by insolvency and tax law and understanding the default risk levels of banks, customers and suppliers. In the current critical situation, speed is more important than ever.

How you can stabilise your company: develop scenarios and gain control of the situation

Once you have adjusted your resources to the crisis situation and key facts about your financial situation are available, it’s time to keep an eye on the further development of the crisis. To do that, develop scenarios based on your external and internal drivers and keep the worst case scenario in mind. This will determine which measures make sense - for example cost reductions, the need to look for new marketing channels, or the development of new product and service offerings. 

Why you should focus on strategy now: Take the next step in your transformation

Even before COVID-19, many finance functions had already started to spend less time on accounting and transactional activities. Instead, the focus has been shifting towards providing analyses that support decision-making. Now the finance function is under pressure. COVID-19 has introduced new issues which have not yet been seen in the normal course of business. Many processes no longer run smoothly. Gaps that have not yet been closed by automation and transformational projects are becoming all too clear. Finance function optimisation, which often made calls for transformation at a very fundamental level, should be at the top of the priority list once the current situation has stabilised. 

Getting through COVID-19 in three waves of response

Mobilise, stabilise and strategise your business. Together we can overcome this difficult situation. We provide tailored services and support to help you navigate your organisation safely through the COVID-19 pandemic. What you will need: an understanding of short-term priorities and a long-term vision.

Mobilise

1. Treasury, Cash and Liquidity Management, Financing

Companies are facing significant liquidity bottlenecks as a result of the COVID 19 crisis. It is vital to remain solvent and financially flexible. "Cash is king" applies now more than ever. So it’s vital to continually update the group-wide liquidity position, and plan potential cash flow development for various economic outcomes using a rolling 13-week forecast or a 6-12-month plan. For the treasury & finance function, securing existing liquidity and creating new reserves (financing, government subsidy programs, internal measures) are at the top of the agenda. But at the same time, organisations need to manage other financial risks (e.g. credit risks, FX risks) more effectively than ever, especially in such uncertain and volatile times. Needless to say, processes and IT systems in treasury must work - even remotely. Our specialists will support you in managing all of your treasury, cash and liquidity management and financing activities.

Contact

Thomas Schräder
Tel.: +49 211 981-2110
Email
 

Thomas Steinberger
Tel.: +49 89 5790-6443
Email

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2. Liquidity Improvement in the Tax Area

As a result of the COVID-19 crisis, many companies are facing significant liquidity bottlenecks. By implementing appropriate tax measures, they can effectively counteract negative effects in order to improve liquidity. For example, regulatory guidelines provide for reductions of advance payment at short notice and tax deferrals can also be requested. In the medium and long term, the focus should be on the comprehensive and timely utilisation of losses and tax support measures. We can advise you on the identification and implementation of such measures both in Germany and abroad.

Contact

Jan Becker
Tel.: +49 211 981-7378
Email

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3. Working Capital Optimisation and Budget Management

In light of the COVID-19 pandemic, the “crisis-related” control of working capital and budget management is increasingly becoming the focus of attention. The big challenge: financial cash resources need to be safeguarded for an indefinite period of time. To get there, activate and deploy five essential levers locally and abroad:

  1. Rapid assessment of the cash and working capital committed within the company
  2. Transparency and focus on incoming payments (cash-in)
  3. Control over the timing of outgoing payments (cash-out)
  4. Transparency of operational cash flow and requirements in the supply chain and inventory management
  5. Modelling of operational working capital and cash and/or budget scenarios

Contact

Rob Kortman
Tel.: +49 170 987 9253
Email
 

Claus-Michael Wiegels
Tel.: +49 69 9585-1084
Email

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Stabilise

1. Accounting, Financial Reporting, and Capital Markets Issues

Especially now, it’s critical that companies are able to assess the impact of the pandemic on accounting and financial reporting and adequately inform their shareholders and stakeholders about the direct and indirect financial implications of COVID-19. That’s made particularly challenging by the use of virtual teams to meet reporting demands and deadlines. We can help answer any questions you  have when it comes to reflecting the crisis situation appropriately in technical matters and support you in defining and implementing control-relevant KPIs during the crisis.

Contact

Rüdiger Loitz
Tel.: +49 211 981-2839
Email

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2. Controlling and Corporate Steering

Do you already know how your financials will develop over the coming days, weeks and months? If not, you should, because reaction time is now key. Impact assessments are difficult to conduct meaningfully due to increasingly complex causes. So planning cycles should be reduced to a minimum and simulations for various COVID-19 scenarios established. We provide support with your rolling forecasts, e.g. effects of short-time work compensation, and simulations based on historical crisis developments, published company data and industry-specific sensitivities, to determine how strongly you are affected.

Finance & Liquidity: Impact Prediction & Simulation (PDF)

Rapid cost and profitability management that goes beyond the obvious (PDF)

Integrated Business Simulation (Webinar)

Kontakt

Gori von Hirschhausen
Tel.: +49 89 5790-6698
Email

Roland Werner
Tel.: +49 69 9585-3158
Email

 

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3. Shared Services and Global Business Services Implications

In day-to-day operations, the availability of Global Business Services and Shared Services may now be reduced or even suspended. Technical outages and limited access rights can occur, data security issues must be taken into account, and there is a need for clarification on various points around technology, contracts and human resources. That’s why it's so important now to analyse the central KPIs more frequently, support the workforce in virtual collaboration, discuss possibilities for capacity adjustments and think beyond the crisis.

Contact

Gori von Hirschhausen
Tel.: +49 89 5790-6698
Email

Michael Suska
Tel.: +49 711 25034-3250
Email

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Strategise

1. Future of the Finance Organisation

Already before COVID-19, many Finance departments were using digitalisation and an increased focus to reduce the time spent on transactional activities and increase their ability to advise operations and conduct decision-relevant analyses. Now, during the crisis, it is more important than ever to provide the right information at the right time in the right format. It’s crucial for the Finance function to enable effective decision making and provide the core business with objective information and scenario analyses, so decisions can be taken about which rationalisation measures will be most effective. At the same time, the Finance function must continue its efforts to become more efficient.

Contact

Gori von Hirschhausen
Tel.: +49 89 5790-6698
Email

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2. Restructuring and Taxes

While a few companies will have to undergo extensive restructuring as a result of the COVID-19 crisis - up to and including insolvency - the majority of companies are likely to incur losses without, however, experiencing existential difficulties. Companies will also face a wide range of different tax challenges given their different starting positions. PwC offers a wide range of restructuring and tax services to help them meet these challenges: from advice on the special tax issues that occur during insolvency to support in divesting parts of their business, obtaining loss carryforwards or taking advantage of tax support measures in Germany and abroad.

Corona Crisis – Tax-specific Measures for German Inbounds (PDF)

Contact

Jan Becker
Tel.: +49 211 981-7378
Email
 

Hansjoachim Köhler
Tel.: +49 69 9585-5039
Email

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Contact us

Rainer Kroker

Rainer Kroker

Liquidität, Finanzen & Steuern, PwC Germany

Tel: +49 30 2636-4407

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