Contingency funds should be used judiciously and only in specific situations, such as:
Unexpected Expenses: Covering unforeseen costs like equipment repairs or sudden increases in raw material prices. Revenue Shortfalls: Compensating for unexpected drops in revenue due to market changes or loss of a major client. Natural Disasters: Addressing damages caused by events like floods, earthquakes, or fires. Economic Downturns: Managing the financial impact of broader economic crises or recessions.