By Gurmukh Singh, Toronto, January 8, 2009 (IANS)

'Cash is king' in the current global turmoil and needs to be managed well, says Ernst & Young in its 10 commandments for businesses to ease pain in the New Year. Stressing that the lessons of 2008 should not be forgotten, the global professional services leader said here Wednesday that businesses will do well to heed the following 10 commandments in the New Year.

One, cash is king. Manage it well as it is the most precious asset that businesses hold. Ensure that even if your revenues are dropping, you have sufficient cash to meet your immediate obligations.

Two, pay attention to risk management as unidentified risk can lead to catastrophic results - shown by 2008. Try to ensure that effective risk management is tied directly to business priorities.

Three, be mindful of compensation as pay programmes affect stakeholders in the form of accounting, reported earnings, disclosure and tax implications.

Four, keep your eyes open for mergers and acquisitions (M&A). Companies looking to expand through M&A should stick to their core services and competencies and ensure they're making smart purchases, including snapping up an underperforming competitor as prices become more affordable.

Fifth, retain high performers in tough times. For companies searching for quick ways to reduce costs, labour may seem like an obvious expense. But retaining top talent during crisis time can help companies stay afloat and reduce costs in the longer term.

Sixth, always look beyond here and now. While navigating current challenges, businesses should not forget about the future.

Seventh, make your non-financial metrics count. In the current state of the global economy, many will argue that economic reality will kill the budding green industry. But investing in clean technology can give you competitive advantage in the form of cost cuts, efficiency, compliance with new regulations and the creation of new products and services.

Eighth, get ready for International Financial Reporting Standards (IFRS). Soon public companies will be expected to provide securities administrators with a detailed implementation plan and quantify the conversion's impact on their business, more precisely.

Ninth, be smart with tax strategies to save you money. Talk to your advisor and do it early. Implement tax strategies to improve cash flow or minimize taxes.

Tenth, see the lemonade, not the lemons. Use the heightened scrutiny caused by the current financial and economic challenges to identify ways to improve and grow your business.

According to Ernst & Young, a climate of fear and risk aversion creates real opportunities for investment and innovation if firms are able to step back and see beyond the current turmoil.