As many businesses learnt during the pandemic – in an uncertain economic environment maintaining cash flow is critical to ensuring a business remains resilience and robust. This article outlines how to maintain cash flow in an economic downturn.

Recession – Economy – Compass

With high-level inflation, low-level growth, and no short-term resolution to the Russia – Ukraine crisis apparent, economic uncertainty is increasing. There are now serious concerns several G7 economies are heading for recession. Businesses need to ensure they are the best possible position to weather the economic storm and be in the best position to exploit growth opportunities when markets recover. Whilst liquidity is not the only consideration when building resilience – as unless a business is financially viable – most pockets will eventually run dry – it will provide a solid buffer whilst other resilience strategies can be brought into play. Below are the three considerations to help your business maintain cash flow in an economic downturn.

Own Your Cash Position

Critical to maintaining liquidity will be ensuring cash flow is a corporate priority. In a downturn it is important that organisations own their cash position. This means establishing clear targets, developing business wide strategies to achieve them, and then ensuring regular reviews of the current cash position versus target to maintain focus.

Cashflow affects and is affected by every element of the business from marketing to sales, operations, and finance. In an economic downturn all these areas will need to make strategic adjustments to help ensure resilience.  Maximising the return on every financial investment will be critical to help maintain cash flow, whether it be optimising the efficiency and effectiveness of marketing spend, production or your financial services team. 

Revisit your payables strategy

If cashflow is tight when are where you spend it is key. Developing clear strategic guidelines such as eliminating early payments, prioritizing key suppliers, actively seeking and exploiting offers of extended payment terms / payment holidays can all help ease the pressure in the short-term.

Optimise your credit management

A downturn is the time for proactive and agile credit management. It is critical to communicate with your customers so you can understand their financial position and any potential risk for your business.  In an ideal world you want to touch your customers before they can default and keep cash moving by ensuring your invoice has been received, reconciled and is on the payment run. This will take both time and resource – which needs to be built into your cash management plan.

It is critical to remember this all needs to be done when everyone else will also be looking to optimise their cash flow and therefore delay paying when possible.  This is when it is important to remember the old credit-control adage that ‘he who shouts loudest gets paid first’. Proactive credit-control and debt collection will be critical to maintain cash flow.

If your inhouse team is already working at full capacity this could be the time to look at an outsourced solution to provide flexible and scalable support. Results-driven, they can usually be working your ledgers within days rather than the weeks or months it takes to train and recruit staff. For credit control the costs are often significantly lower than increasing inhouse headcount, whilst for debt collection they usually work on a contingency only basis. 


It is impossible to see into the future and predict every potential crisis, but whilst we don’t know exactly what challenges await, we do have an understanding of their potential impact on our business and can therefore plan to mitigate them. Through reviewing our historic challenges, both in market downturns and everyday business, we can understand and address our areas of weakness and ensure we have placed our business in the most robust position possible. With a strong cash management framework in place, the business should be in a strong position to address any unforeseen issues swiftly and effectively and ensure the financial survival of the business in any economic climate.

Author: Mark Smith

Director of outsourced credit management solutions providers Barratt Smith and Brown and 4D Contact, and a major share-holder in fintech company Invevo, Mark has over 30 years of experience providing clients build strategic process solutions to mitigate challenging financial markets.  

If you have a challenge within your credit and collections process and would like to discuss how 4D Contact outsourced credit management solutions could help, please click here to request a call back.

Contact us now at or on 020 37691487 for a no-obligation quote.

Interested in receiving more news and views from 4D Contact?

Subscribe to our weekly newsletter

You may be interested in these other recent articles

Common pitfalls when outsourcing accounts receivables.

3 June 2024

Some of the common pitfalls businesses experience when centralising or outsourcing cash collection - and how to avoid them.

Read more

7 factors critical for successful invoice-to-cash centralisation or outsourcing

14 May 2024

Investing in a shared service centre or moving your invoice-to-cash process to an outsourced partner does not automatically guarantee cost efficiencies and an improvement in…

Read more

Key Benefits of Cash Collection Centralisation

18 April 2024

Cash collection is one of the finance functions which can see huge benefits from centralization.  Highly process driven, it is a function for which technological transformation…

Read more

Key tips for successful credit-control outsourcing.

13 March 2024

Are you a finance leader looking to streamline your credit control function? Outsourcing this task can be a game-changer for your business. Outlined in this…

Read more

With results-driven customer contact being their primary, not secondary, function, 4D Contact produced an increase in performance of 81% during the pilot project, as well as improving interaction with our valued customers.

Due to this success we have engaged with 4D Contact on a permanent basis and extended the remit to include Ireland as well as the UK.

Richard Clow

Head of Consulting, Schindler UK

Book a consultation

Discover the benefits your business could achieve with a bespoke, outsourced contact solution.

Our brief consultations are designed to outline the impact your organisation could achieve, whatever your starting point and unique requirements.

    Register to receive updates

    Enter your email to receive regular news and updates.

      Our contact details

      4D Contact: London

      Barratt Smith Brown & 4D Contact
      Bentinck House
      3-8 Bolsover Street
      W1W 6AB

      4D Contact: Malaga

      Four D Contact S.L.
      Camino de las Cañadas 1D
      Centro de Negocios Martín Buendía
      Planta 1ª, Oficina 17
      29651 Mijas Costa
      Málaga, Spain

      4D Contact: Dublin

      The Black Church
      St Mary’s Place
      D07 P4AX

      Global Sales Enquiries:

      © 2024 4D Contact. All rights reserved  |  Privacy  |  Complaints policy
      Registered in Ireland, number 626576  |   Website credit