According to Internal Service Revenue, more than 35% of businesses never reopen after a disaster. In the case of small companies, the number is likely even higher.
Amid economic downturns, business owners often feel the immense pressure of getting the financial performance back on track; they become even more concerned about their company’s future. COVID-19 has affected broad areas of different industries, changing the way owners handled their expenses. Businesses that have skilled bookkeepers are taking complete support from them. Companies that lack accounting professionals are turning to accounting consultants, accounting and bookkeeping outsourcing services, or seeking help from part-time accountants.
Doctors and nurses are working on the front line, saving human lives. Similarly, accountants are assisting business owners to recover from the severe economic impact of the coronavirus pandemic.
Here’s how accountants help in surviving an economic downturn.
1. Addressing the crisis
COVID-19 crisis has resulted in financial stress for many owners. Due to the rapid spread, thousands of companies had to keep their doors closed for some time, while their supply chain was dramatically disrupted. Adding to that were customers not being able to come out of their homes and make purchases.
In such times, accountants can help prioritize the optimization of cash reserves while preparing a centralized finance management plan along with different other strategies to minimize expenses and financial loss.
2. Getting finances back on track
Once the cash reserves are managed effectively, the next thing your accountants can help you with is to get your business back on track by making operational improvements to boost productivity that will, in return, bring revenue.
Besides, they help you identify business capabilities you should invest in and improve your company’s cash flow, leading to the vital, continuous flow of cash coming in and going out of your business.
3. Balancing the balance sheet
Accountants can convert the current times of crisis into opportunities for in-depth assessment of finances and balance sheets, such as reviewing the money owed to creditors, reducing inventory, focusing more on managing accounts receivable and payable, etc. This can further help your company become financially flexible amid crisis.
Likely, returns on investments will not come as projected due to the pandemic. Still, accountants can help you quickly utilize financial resources on high-yield projects and business initiatives expected to bring value to your company in the future.
4. Thriving in the new normal
Once financial operations and performance start to stimulate, your accountants can help you with investment planning, portfolio preparation, and significant business initiatives that will make your company win once the situation gets better.
While all business aspects are essential, surviving through the current economic crisis requires you to reallocate financial resources for business growth and expansion in new normal times.
Action plan for finance teams during the economic crisis
1. Ensure uninterrupted communication
You must keep your company running in a crisis, for which you might have to make instant moves, for example, adopting remote work solutions overnight. While allowing your employees to work from home, ensure continuous communication is held between the finance team in order to keep the accounting and core-operational workflow streamlined.
2. Have an action plan (even for a short-term)
Prepare and implement an action plan to tackle the challenges arisen out of the virus outbreak. You need not make a detailed plan; as the future situation is unknown, make short-term plans for expenditure.
3. Keep key suppliers informed
Finance management can become tough during an economic crisis; payments such as rent, payroll, insurance, etc. can lead to a shortage of capital. However, if your accountants have maintained good relations with suppliers, you may ask for some time for payments; this will also help you avoid late payment fees.
4. Help your clients when they need you the most
Similar to yours, your clients might also be dealing with business problems. This is the time when you can build trust and earn client loyalty by supporting your clients in the best possible manner.
Why should businesses outsource accounting and tax functions in crisis?
The coronavirus pandemic has brought complications in the accounting and taxation processes. Governments have announced subsidiary packages to support worst-hit industries and businesses; however, this has given birth to new challenges for accounting and tax professionals.
Amid all this, accounting and bookkeeping outsourcing can simplify accounts and finance management while accelerating key business aspects.
Outsourcing – a way to effective crisis management:
Companies are making new plans and strategies to fight the impact of the outbreak on their business. Outsourcing accounting, bookkeeping, and in fact, tax-related functions can help your business come up as a competitive company in the future. Apart from reducing the workforce and taking advantage of relief packs, companies are adopting virtual work environments or outsourcing critical operations and processes.
Governments around the world have announced relief or incentive laws during the early stage of the outbreak; this has dramatically impacted tax requirements. Similarly, several tax code changes are also done in the U.S in later March 2020, affecting the state, federal, and international taxes.
As a business owner, you might not be aware of all the tax changes and tax requirements your business needs to meet. Thus, it would be best to have a bookkeeping outsourcing service provider on your side in times of crisis, helping you efficiently manage everything from accounting to taxes.
Today, when different industries and companies face a considerable financial impact due to the pandemic, you need the right accounting and tax service provider for your company. The impact has led to a global economic downfall, leading to emerging difficulties for businesses worldwide. The entire business landscape will not be the same after the COVID-19 is fully contained, and you (as a business owner) will have to adapt to a lot of changes occurring in your industry.
At Accounting To Taxes, we can help you take quick, appropriate actions to bring your company better. We have a team of professional, experienced accountants and bookkeepers to help you meet new challenges concerning business financial management. Besides, our tax experts can help you prepare taxes accurately, eliminating the chances of an audit or penalty. Lay your trust in us amid crisis, and we will get through this hard time together. Know more about our services in detail. Call us today to get a free trial; call at +1 646 688 2821 or email at email@example.com