COVID-19: Key Actions for SME’s to Navigate through the Crisis

For every SME, their accountants are considered as their trustworthy business advisor. And ever since this ‘Black-Swan crisis’ has hit the world, most SME’s seek all the guidance they get from their accounting professionals to navigate through this crisis.

In this difficult time here are some key action plans for SME’s to adopt.

Properly Estimating the Financial Impact & Devising a Stratagem to Handle the Situation

This pandemic has affected countless businesses in different spheres. But then you can still function if you devise a strategy to work online and have a continual presence. Duly inform all the clients about your availability. 

Of course, financially the business will be low on cash reserve, so the accountant(s) should come up with ways to mitigate the effect by reassessing the financial expenses and thinking out of the box.

Your accountant should re-do the budget to get a clear idea of the cash flow crunch and take immediate action by managing stocks, debtors, creditors and other expenses. The market trend in this pandemic is to go digital. So, reduce physical contact and look to function online.

Stay In Touch With All Your Suppliers

During this pandemic situation, it is important to stay in contact with each of your suppliers, especially for locations that have been severely affected by the virus contamination. 

There could be a possibility that some of your suppliers or clients may not be available to work with you. So, look for alternate clients/suppliers to keep the business running and cash flowing.

Also, Inform Them of Your Immediate Actions Taken For Survival

You should inform your clients of the immediate course of action which you will take for the business survival.  

Some of Them Include:-

• Renewing & Adjusting Forecasts of Their Cash Flow: - The accountant should determine how much will this impact on sales-drop and how it will hamper the ability to pay suppliers and their debt. The wise move would be to continue the payment whenever feasible to the supplier to avoid a financial system collapse.
• Re-Access The Business Model: - Ascertaining whether the SME can keep delivering goods and services in some alternative manner- example via online or whether one can downsize or even completely stop activities like travel, sales, marketing and other associated dealings.
• Checking Insurance Eligibility & Communicating With Staff Of Possible Short Term Pay-Cuts: - Inspecting if they are eligible for any claims in the event of a financial loss! Also discussing with your staff members about working from home with a possibility of short term pay-cuts..
• Even Negotiating with Debtors: - Requesting them for early payments by adjusting their payment cycle in exchange for some discounts.

Prepare A Contingency Plan with the Accountant: - 

The SME accountant should be entrusted to perform a financial analysis to make sure the business is fully prepared to tackle the crisis.  The company head should work with the accountant and come with a comprehensive risk management contingency plan only to be prepared if things get worse in the coming months.

You can even take help from professional accounting services in Oakville, Vaughan and other neighbouring suburbs. These specialists will remotely work with you and handle all your accounting operations aptly without you having to physically meet with them.

A top-rated accounting firm serving in these suburbs fully understand how important managing business funds are in this lockdown phase. Using their experience and knowledge, they will collectively help you devise a strong action plan to maintain healthy cash flow and steadily navigate through this existing crisis.

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Created on May 13th 2020 00:29. Viewed 381 times.

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