Like any crisis, the global COVID-19 pandemic will eventually pass. Accountants will play a crucial role in assisting SME’s in finding the best measures to brave the current crisis and prepare themselves for the new normal.
In late June, the small business survey by Census Bureau indicated that almost 90% of small businesses experienced a strong (51%) or moderate (38%) negative impact from the pandemic. Supply chain disruptions were experienced by 45% of businesses, and 25% of businesses witnessed cash reserves issues. So, accountants just need to:
1. Inform about all aid options: Being an Accountant of SMEs, you should be aware of all financial and other forms of aid provided by National governments at any level so your company can benefit from it in any case.
2. Apply the available aid to your clients’ situations: Being an Accountant, you can guide them about all the claims they can make and access the emergency financing provided by governments easily.
3. Identify problems and mobilize emergency communications: Businesses need to establish parameters for proper communication among managers and their teams. They should avoid poor or incomplete communication as it can sink an organization during such a crisis.
3. Help with immediate business survival: For many businesses, especially those that have experienced dramatic revenue losses because of COVID-19, repayment will not be possible or will put significant strain on the business’s cash flow. You can also review your Client's Cash flow and reassess/readjust the forecasts. It will help them determine the impacts that the sales cutting will have on debts payable to suppliers.
4. Value human bonds over financial goals: Some of the hardest decisions any business leaders will have to make during a crisis involve the human element: employees, payroll, clients, and customers. But if you can, always favor your employees and your regular customers over short-term profits.
5. Plan for the medium term: Most importantly, reconsidering the business model can have a positive chance of their survival in these tough situations. (Whether they can deliver services/goods in an alternative manner, stopping or downsizing some activities, like eliminating some marketing expenses, etc.)
6. Consider remote work: Rather than ditching remote work in the first place, think of this challenge as a stress test that can help you identify gaps that your organization needs to fill to stay competitive going forward. This will save you from a lot of expenses, like investing in office space, office goods, employees' travel time, etc.
7. Try outsourcing services: If you have a complex tax situation, then consider a tax preparation outsourcing company during this tough time. It helps you a lot, and you can focus on your core areas and generate more business and revenue.
Businesses or companies have different needs and goals when it comes down to scaling down expenses and limiting budgets. But, SMEs can follow these key steps provided by their accountants to avoid losses during the crisis.
