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How an integrated approach to liquidity can help you embrace new levers of growth and build a resilient tomorrow

Authors:
Kent Smith

Partner, PwC Canada


Monica Sharma
Director, PwC Canada

Recent disruptions have challenged Canadian businesses like never before. During the various waves of the COVID-19 pandemic, for example, many companies saw their sales, revenues and cash flows severely affected, driving them to conserve cash and embrace cost efficiencies. Even businesses that benefited from the dramatic shift in customer behaviours came under pressure to find liquidity so they could better respond to increasing demand, pursue merger and acquisition opportunities or accelerate initiatives to stay ahead of key priorities like digital transformation and performance on environmental, social and governance (ESG) matters.

As Canada emerges from the pandemic, many business leaders are setting their sights on transformation and growth. But they’re still being cautious as they want to be sure they have the cash to move their strategic activities forward. Some organizations are also watching out for potential near-term cash pressures, especially with upcoming audits of Canada Emergency Wage Subsidy payments creating concerns about clawbacks. Others are looking for ways to build resilience amid renewed macroeconomic uncertainty and volatility.

The good news is there are many levers to unlock cash, including in the tax function. But for many companies, the challenge is figuring out where to look. Through our work with businesses across Canada, we’ve identified four common tax drivers of liquidity that are often overlooked when it comes to reviewing potential opportunities: labour; customer transactions; capital investment and infrastructure; and tax compliance and corporate structuring. By taking an integrated approach to reviewing these drivers, companies can identify and prioritize areas of opportunity so they can free up cash and forge ahead with their goals.

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Key steps to unlock cash

How can you increase liquidity to achieve your goals? To start, we suggest considering the following steps:

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An opportunity to secure the future and create new value

At a time of increased disruption and accelerating change, organizations need to look at all angles when considering their next moves, whether they’re navigating their current requirements—like a sudden need for cash due to a crisis—or exploring their long-term growth plans. By looking at your plans and operations holistically—starting with identifying your strategic goals and then aligning them with the most promising opportunities to free up resources and liquidity to fund them—you can put your organization on the right path to creating new value and sustained outcomes for the future. And by approaching these issues with a broader lens that sets out what you’re looking to achieve with the funds freed up, you can make sure you’re investing your capital in the most effective way possible.

Reach out to our community of solvers to discuss opportunities for unlocking cash within your organization.

 

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Contact us

Kent Smith

Partner, Ottawa, PwC Canada

+1 613 755 8742

Email

Monica Sharma

Director, Toronto, PwC Canada

+1 416 687 8027

Email