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Cash is King

03 July 2009 / Simon Young
Issue: 7376 / Categories: Features , Profession , Costs
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Simon Young advocates a tripartite approach to essential cost cutting

For many firms, the next few months will be crucial for their survival, as the possibility of recovery is tantalisingly dangled in front of them. Will their cash last until they can take advantage of such recovery, or will the efforts which they, and in many cases the bank’s “intensive care” department, have put into staying afloat prove to be insufficient in the end?

Three ways to cut

Cost cutting comes in three guises. The first is reducing future costs by making current investment, eg acquiring a new IT system to drive increases in productivity. For firms in trouble, this is not relevant. The second is cutting down input costs because outputs have diminished. The obvious example is cutting staff when there is less work. Most struggling firms will have had at least one round of such changes.

The third, however, is attempting to cut the cost of inputs for a constant level

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MOVERS & SHAKERS

DWF—19 appointments

DWF—19 appointments

Belfast team bolstered by three senior hires and 16 further appointments

Cadwalader—Andro Atlaga

Cadwalader—Andro Atlaga

Firm strengthens leveraged finance team with London partner hire

Knights—Ella Dodgson & Rebecca Laffan

Knights—Ella Dodgson & Rebecca Laffan

Double hire marks launch of family team in Leeds

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