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According to IRS data, more than 35% of businesses never reopen after a disaster. For small businesses, these numbers are likely much higher. During economic downturns, leaders often feel stuck and isolated, and many business owners are extremely fearful about the future of their company. COVID-19 has shaken most companies and overnight has changed the way business owners are looking at their expenses. Firms that have stellar bookkeeping teams are turning to them for support. Some businesses that do not have strong controllers or CFOs are turning to consulting firms, outsourced accounting services or fractional teams for support. Like doctors and nurses, accountants are on the front line, helping business owners recover from the economic pain of this global pandemic.
Accountants Are Experts You Can Trust
Many business owners avoid their books because they don’t understand the numbers and are afraid of what they will learn. Like going to the doctor, people wait until the pain is bad enough that they can’t avoid it anymore. Fortunately, once a more senior person, such as a CFO or a controller, does an assessment of the books, most businesses will find that it wasn’t as bad as they thought. Fortunately, there are likely cures to most of the issues the business is having. Once the issues are corrected, the business owner should lean on their head of accounting or finance to keep things running smoothly and to make sure the business stays fiscally healthy.
As businesses respond to the novel coronavirus — and any crisis, for that matter — they will likely go through three phases: reacting, finding resiliency and adapting to the “new norm.” Accountants are there to help. They can review the numbers for accuracy, find ways to reduce expenses, help you get the max forgiveness on loans or find the best way to utilize your capital. Most importantly, a good controller or CFO can help business owners create a profitable plan to move forward.
Accountants Can Provide A Business Health Check
For just about every business in the nation, revenue projections have changed. Some businesses have seen an increase in revenue, while others have seen drastic declines. Some businesses have even had to shut down. Due to COVID-19, almost every business owner will need to reset their goals, create a new cash flow forecast and revise their revenue projections. They will need to go through their budget and make numerous changes, cutting out expenses that may not make sense for 2020.
When the economy is strong, some businesses have the luxury of not needing to closely manage every single expense in their financials. But now, every single cost is being reevaluated.
Just as healthcare professionals are trusted to keep you healthy, a good accounting team should be trusted to keep your books healthy and your financials accurate. Relying on your accounting team to slice and dice your data and give you accurate information will give you peace of mind that the decisions you are making are backed up by numbers.
Accountants Use Precision And Expertise To Strategically Help Businesses
Like surgeons, accountants help you assess your businesses at a more granular level. For example, you can break down your cash flow forecast into a weekly spreadsheet (here’s an example with more details). You can also set up your projected costs over the next few months by making a revenue forecast and monitoring your daily expenses. Accountants will help you answer questions, such as, “Will we be in the red a few months from now?” or “What’s the plan when business picks up?” Every business has a unique set of variables that may need special review. Now is the time to start looking at your books and discuss your concerns.
Going through this process with the right team can add transparency to your company’s situation and guide you through tough times. Bookkeeping is black and white: 2 + 2 = 4. Results aren’t based on emotions. Because of this, the right accounting team can help leaders avoid fear-based decisions by adding transparency and facts to the equation. This can also give peace of mind by providing accurate visibility into the state of your business.
Accountants Can Help Prevent Unhealthy Business Decisions
As people joke about “gaining the COVID-19,” it can be easy to slip into making unhealthy decisions when faced with the current level of uncertainty. As a business owner, it can be frightening not to be able to pay your bills, but that’s no excuse to start making choices that are bad for the long-term health of your company.
If you’re having trouble paying your vendors, the right team of accountants can help you come up with creative solutions. Keep a level head, and don’t burn any bridges. You need these relationships for your businesses to thrive long-term. Accountants can help you have open and honest conversations with your vendors and clients and find ways to negotiate. The right team can put a plan together to lengthen payment terms, pay less upfront or break expenses down into smaller chunks. They can deal with customers who have trouble paying their monthly bills by helping to come up with payment plans and then helping enforce those plans.
Accountants Help Business Owners Decide The Best Uses Of Their Capital
They will help you keep a level head so you don’t cut the wrong costs. For example, they may advise you to not cut all of your marketing; instead, consider how critical this is to your business’s growth, and budget accordingly. Look at who your least-profitable clients or products are. Cut the activities that support these low-margin customers/products first to free up capital to provide better services to your best customers and employees.
As you rebuild your workforce, consider more efficient options, such as outsourcing your back-end office or hiring more remote workers to cut real estate costs. As this phase in our history passes, make decisions that will make your company stronger and more resilient. Hiring the right accounting team or high-level person like a controller or CFO can feel daunting, but remember, their job really is to clear away the unknown and help you make a precise plan of action. Accountants are the first responders in our economy, there to help businesses through these difficult times. Don’t be afraid to rely on them during the current economic downturn.
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