Liquidity, treasury, cash… are highly valued terms at this time. The Covid-19 has generated a state of uncertainty that will last for the next few monts, making cash the new protagonist. In a normal situation, excess liquidity could be considered a bad investment, however, today it is a source of security that allows companies to face this crisis. Today more than ever “Cash Is King”.
In the Covid-19 crisis, Cash Is King
This expression was coined in the 90s, but it was not until the crisis of 2008 when it became especially relevant, since when everything goes well having cash on hand means that it is not producing benefits, being in periods of instability when CFOs they begin to prioritize cash as insurance.
One of the large investors, Warren Buffett, has commented that he usually operates with a particularly high level of liquidity to be able to face any unforeseen event, promoting the importance of the “Cash Is King” concept, especially in times of crisis such as the one we are going through globally. with the Covid-19. Real estate magnate Alex Spanos and Volvo CEO Pehr G. Gyllenhammar have used this expression to emphasize the need for liquidity at times as rare as today.
Cash is vital in this state of alarm for both multinationals SMEs and freelancers
Expenses do not discriminate, it does not matter whether it is a multinational corporation or a self-employed, it is essential to have cash to meet payments. However, the common practice of financial departments is to invest most of the available cash in order to obtain the highest possible return, leaving many companies in a vulnerable situation when a crisis arises, especially one as unexpected and severe as this from the coronavirus.
With this sudden change in the outlook and the short-term need for companies to meet their obligations, CFOs must seek new sources of liquidity.
The deduction of VAT paid on travel expenses as a formula for obtaining liquidity
The tax framework in many countries allows to obtaining liquidity through the deduction of the VAT paid on the expenses incurred. The possibility that the law grants of requesting exchange invoices of those expenses justified by means of simplified invoices within the general tax prescription period, allows all companies to deduct all the supported and not deducted fees in their next liquidation of the Tax on Added value, thus decreasing the amount to be paid and consequently optimizing your Treasury.
60dias now more than ever with their clients
In 60dias we are aware that now, with the current estate of alarm, more than ever, companies need liquidity. For this reason, we are committed to the objective of reducing recovery times as much as possible, redoubling efforts and increasing the capacity of the digitization and accounting departments.
With success rates above 80% recoverable VAT, our goal is now to accelerate recovery processes as much as possible. The entire staff is committed to this common goal, processing 100% of the simplified invoices received and providing a fast, simple and personalized service to each client, making us an essential support to overcome the Covid-19 crisis to companies that want to recover for this concept.