Financial management of F&B businesses when new is normal – It is hard to deny that the Pandemic Corona Virus disease 2019 ( Covid-19 ) has had a major impact on economic instability, both globally and nationally. Macro and microeconomic conditions also suffered, including businesses in the food and beverage (F&B) sector.

Here are some things you can do to be able to manage the food and beverage businesses well.

Managing F&B Business Sales Performance

The COVID-19 pandemic that occurred in various parts of the world has caused consumer purchasing power to decline, in the end, sales transactions also declined.

This condition certainly causes the F&B business sales target to be not in accordance with previous planning. So, you are advised to run a number of sales strategies in the New Normal era before business conditions are not worse.

Some things that need to be done include rearranging sales targets according to current conditions so that they can know the projected business performance in the future.

Furthermore, you are also expected to understand various new policies and regulations related to the implementation of the new normal. For example, if you sell food and drinks at a mall or market, you need to know the rules that apply at that location, in the form of when the mall or market may be reopened, or even-odd rules for market residents.

By knowing the applicable policies, you can determine the right concept or business strategy in accordance with the applicable rules.

Another sales strategy that could be an option is to provide product discounts or discounts. Although the margins obtained are cut, at least you pocket the income to adjust sales targets that have been made previously.

In addition to price discounts, you can also implement product bundling or provide a combined product package to expand sales coverage.

Furthermore, maximizing online sales activities such as being a partner providing online food delivery, selling on social media, or e-commerce. If you have previously sold online, now you can manage accounts and make product concepts more mature.

These efforts can also be accompanied by the use of digital ads or digital ads. In the next step, you can create a list of consumers and communicate actively with these consumers because it can open up opportunities for repeat purchases by consumers.

The final strategy is the sale of ‘Pick up the ball’. This strategy is even carried out by companies with large brands because it is considered effective as a sales method when purchasing power is declining as it is now.

Management of Production Cost

In terms of cost of production, Pandemic Covid-19 makes it difficult for F&B business people to find raw materials because of declining productivity and impeded distribution channels.

In addition, the pandemic and new normal periods will make the process of shipping raw materials from suppliers tend to be longer, not immediately as before.

In the current conditions, it may be difficult to get a supplier who applies a period of payment of delayed goods with a span of several months or even weeks. Because most business people need funds and apply raw material purchases in cash.

Another problem that arises during the new normal period is a large number of production division employees is not balanced with the initial sales volume which is certainly minimal because it has not returned to normal.

In addition, you are advised to look for suppliers who apply the longest payment term so that the production burden can have a longer time. Another strategy, you need to implement the transfer of employees from the production to the promotion, marketing, and sales. This needs to be done to aggressively boost sales figures.

Management of Operational Expenditures

Covid-19 pandemic has an impact on companies because they have to pay salaries and employee benefits, even though production performance is not running 100%. In addition, the burden of renting business premises must also be paid even if it is not used optimally.

At the beginning of the new normal period, usually, the F&B business will do promotions to regain customers who were previously rested. This activity certainly requires an additional promotional cost.

In addition, the company also needs funds to repair its business premises so that it can operate again optimally.

Nevertheless, you don’t need to worry too much. In the initial stages, you only need to observe and analyze the condition of the cash flow in detail. If you don’t have an emergency fund, then you should do the following.

  • First, restructuring the salary burden. One of them, cut employee salaries by giving employees an understanding of the current state of the company.
  • The salary deduction is expected not to burden employees if you apply a sales commission system or share profits with employees.
  • The next effort that can be done is to relocate the place of business in accordance with production and sales plans. Then, maintain expenses that are important for the business.
  • Another strategy that can be done is to use digital devices or digital tools so that operations run effectively. Some tools that can be used include, management tools, collaboration tools, or finance and accounting tools.

We provide a variety of excellent business support features, such as reporting and management of F&B business finances, business dashboard displays with real-time data, inventory management, sales and purchasing modules, bank reconciliation, business integration, asset management, and tax management.

Cash Flow Management

In terms of cash flow management, the liquidity ratios of most F&B businesses become substandard when the economy slows down due to the Covid-19 Pandemic. Cash flow is even estimated to only last for a period of 1-3 months.

The revenue targets were not according to plan, and most companies were unable to pay suppliers and operational costs.

In this case, several strategies that need to be carried out include evaluating the level of financial difficulty of the company. Me- review and assign priorities to capital expenditures ( CAPEX ) and operating expenditure ( operating expenditures ) company.

Next, take advantage of the relaxation and stimulus policies set by the government. Rearrange cash flow projections, for at least the next 12 months, then review and oversee them within a weekly period.

Adding capital deposits by shareholders while delaying payment of dividends can be an option to maintain cash flow well in new normal conditions. Not only that, you are also advised to look for short-term loans that are soft loans for the needs of the next 3 months.

Other strategies, create a minimum reserve fund for 3 months or release short-term investment assets. However, if cash flow is surplus, invest in a growing business.

Management of Accounts Receivable

In the case of trade receivables, Pandemic Covid-19 is expected to create low receivable collectibility, and cash in from the receipt of receivables is also not on target.

Facing these two problems, you need to apply an early payment discount (EPD). In addition, billing in a timely manner, and actively communicating with customers.

Inventory Management

Regarding supplies, the worldwide spread of the virus is thought to cause inventory movements in the F&B business sector to be slower. It even causes raw material inventory to expire due to decreased sales.

The delivery of raw material inventory also became not smooth. In the end, you experience a lack of cash flow to purchase new raw material inventory.

In addition, you are also advised to choose supplies with longer durability while determining the quantity of inventory that must be stored.

From the supplier’s side, you need to find a supplier who gives the longest payment term and choose the supplier with the lowest risk of late delivery.

The last strategy that is often overlooked is checking carefully when supplies arrive and returning them immediately if they don’t match the order.

Debt Management

Related to financing issues, debt payments are often not smooth because of economic downturns. Not only that, F&B businesses also have difficulty adding new debt. Instead, they were asked to speed up debt repayment because the third party needed funds in the midst of the economic crisis.

Some debt management strategies that you can do include, determine debt repayment priorities and renegotiate with creditors regarding debt maturity. Another option that can be done is to combine debt and apply for new loans to repay the debt.