In the short time coronavirus has impacted the global economy, cash has become the coveted asset in troubled times. Dealers should continue to develop plans for cash conservation as part of their overall business risk and continuity plan. If you are a typical dealer, you probably check your cash balance daily. Robust cash management buys valuable breathing space. Dealers must take a hard look and find ways to operate lean, save cash, and make cash last longer. Consider these ideas to maximize cash flow during the COVID-19 outbreak and beyond:

• A dealership should review expenses and look for areas where you can save money. As you continue to monitor and strategize, stay focused on identifying additional ways to reduce your cost structure and breakeven point. Take a hard look at which bills need to be paid (and when) and which ones can be deferred, reduced or paid in installments.
• For example, advertising is essential when operating your dealership, but it needs strategic management. If you haven’t done so already, consider reducing the cost of traditional advertising and utilize social media platforms, such as Facebook, Twitter and Instagram. Encourage employees to share posts on their profiles to enhance social media exposure. Always remember to be careful and adhere to state and federal advertising regulations when creating nontraditional social media advertisements.
• Another savings option to consider is replacing traditional desktop computers with laptops. Laptops typically use less energy. This could reduce your monthly energy bill and, at the same time, provide seating flexibility to assist with social distancing concerns.
• Reach out to OEMs and floor plan lenders and see if they will suspend curtailment payments on aged inventory. Some floor plan lenders are deferring interest payments. Consider taking advantage of the ability to defer this large liability.
• Some dealerships may be in an equity position with their inventory and can maximize the utilization of cash by floor planning all new vehicles and allowable used vehicles.
• Apply for an increase of the reimbursement rate for parts or labor paid under warranty. In many states, manufacturers are required to reimburse a dealership for warranty repairs, average labor and parts rate charged to retail customers. Many service departments have the time to print repair orders and make this submission without too much disruption during peak hours. In many cases, the dealership has limited operating hours, and the repair orders can be programmed to print when the service department is closed.
• Wholesale only those aged used vehicles that will not be retailed. The price of used vehicles dropped dramatically when COVID-19 shutdowns began; however, the prices for used vehicles have recently jumped sharply. Because inventory is difficult to acquire at an affordable price, many dealerships are branching outside of their normal shopping radius. Consider exploring different purchasing options.
• Work with lenders and ask for forbearance or payment plans for outstanding loan balances.
• Discuss options with your manufacturer to loosen restrictions on parts and core returns.
• Increase your cash position by reviewing receivables. Work to minimize balances in Contracts In Transit, Accounts Receivable, Incentive Receivables, Finance and Insurance Receivables, and Warranty Claim Receivables. These balances should be reviewed regularly to expedite collection. This may be an ideal time to reevaluate dealership lending practices.
• Reduce personnel expenses by hiring smart and maintaining talent.