Tips for Managing your Cash Flow, and Employees during COVID-19

Recent shutdowns, due to the novel coronavirus (COVID-19), leaves many people feeling apprehensive and unsure of what the next few weeks, or months, and how it will affect business. Already, the ADA has recommended dentists treat only emergency dental needs for the next three weeks. As coronavirus updates continue to change, Bryant Consultants wants dentists to explore different ideas for managing cash flow, and their employees during coronavirus pandemic.

Tips for Managing Cash Flow During COVID-19

This is a critical time to ensure that your cash flow is under control.

Here are some ideas for managing cash flow throughout the next few weeks if you get in a pinch:

1. Discontinue payroll for the dentist, spouse, or their children. Instead, considering taking required draws from shareholder distributions from your practice if you need cash at home. This move could help minimize taxes, including payroll, federal, and 401K deferrals during this uncertain time.
2. Evaluate supply purchases for your practice. Remember, you still will be seeing patients that require emergency care, but you may not need supplies for nonessential treatments. This will be up to the discretion of each practice, but you may need to hold off on purchasing certain supplies for the next few weeks.
3. Contact your bank, if you have any lines of credit, and ask if you can make interest-only payments for the next one to three months. Also, if you have been making additional payments that apply to your principal balance, adjust accordingly to improve your cash flow. This will only be temporary. If you need additional lines of credit, speak with your bank to see if an emergency line of credit is available for your practice’s immediate needs.
4. Likewise, contact your credit card companies and request to skip a payment or two, until the coronavirus pandemic settles and business picks back up again. While cash advance options are generally not recommended, you may consider using this as a last resort.
5. Put a hold on 401K or IRA contributions until cash flow improves. After the coronavirus shutdown, you will see an influx of patients and could make up these contributions as cash flow increases. Your 401K account may allow loan options, which you can explore if needed.
6. If you have any investment accounts, you could consider liquidating enough to cover your immediate cash flow needs.
7. Sit down with your spouse and your family to discuss minimizing personal expenses right now. Stick to the essentials, gas, and groceries, but hold off on nonessential purchases for right now, if at all possible.

The Relief Package Bill Explained

Employee payroll costs are undoubtedly your largest expense, and most difficult to control within your practice. While you care for your employees, you still have a business to manage. The Relief Package Bill 363-40, recently passed by the House on March 14, is backed by the President and is expected to pass the Senate. Here are the four main ways this bill will affect business owners.

• Emergency Paid Sick Days – This bill allows workers 14 days of paid sick leave available without a waiting period. It ensures employees can take sick leave if they need to miss work to care for a sick family member, are impacted by a self-quarantine, as well as those needing to stay home and care for their children due to school and daycare closures. The bill, via a payroll tax credit, will reimburse small businesses with 500 or fewer employees for the cost of 14 days of sick leave.
• Emergency Paid Leave – The bill includes a new federal paid leave program designed for those that are unable to work because they tested positive for COVID-19, are under a mandated quarantine, or are caring for someone with the virus, or affected by school closures due to the coronavirus pandemic. Workers that are eligible would receive these benefits for a month, although benefits may be available for as long as three months, and would be calculated at two-thirds of the employee’s average monthly earnings. Employees receiving unemployment compensation through their employers are not eligible for these benefits.
• Small Business Exemption – Currently, small businesses with fewer than 50 employees are exempt from the requirements listed above.
• Expanded Unemployment Insurance – The bill allocates $2 billion for state unemployment insurance programs. It will waive work search programs that typically are required to claim unemployment benefits, or the general waiting period for those diagnosed with COVID-19, or for individuals who lost their job due to the spread of coronavirus and community-wide shutdowns.
• Tax Deferment Option – Just released in a press conference, the package will include tax deferment for up to $1 million for individuals, and $10 million for corporations, interest-free for 90 days. Businesses, and individuals, are encouraged to file their taxes by the deadline of April 15^th, if possible. The IRS will continue releasing updates regarding this matter.

Please bear in mind that this bill still awaits Senate approval. Bryant Consultants is staying informed of these updates so that we can provide the most beneficial information to you. We encourage you to follow us on Facebook and Instagram to receive immediate updates regarding coronavirus pandemic and its effect on small businesses. We ask that you direct questions or concerns to us directly or call (877) 768-4799.