COVID-19's Impact on Small Businesses:How Professional Accountants (SA) Can Help
19 January 2021
COVID-19’s Impact on Small Businesses: How Professional Accountants (SA) Can Help
By Karl Smith – Education, Training and Membership Support: Senior Manager at SAIPA
As the global economy continues to falter under the strain of COVID-19, small businesses are especially hard to hit. Confronted by a massive second wave of infection in South Africa, along with another lockdown, they are seeing their sales and cash flow falling to disturbingly low levels. Unfortunately, many have ceased operations while others, even if not defeated, have lost key customers and vendors across their supply chain.
The more astute – and determined – have recognised the value of turning to a Professional Accountant (SA) to keep their companies afloat. Over and above traditional financial duties, Professional Accountants (SA) also offer business advisory services. They are competent to restructure small enterprises, so they remain operational during periods of economic uncertainty.
Below are just some of the ways a Professional Accountant (SA) can help your small business.
In war, field doctors must make tough decisions about which of the wounded to expend scarce medical resources on. A Professional Accountant (SA) can guide you through similar necessary decisions about unprofitable products, vendors, employees, operations, resources, assets and even customers. Developing a mindset willing to let go of these once acceptable elements is crucial to your survival.
After discarding past assumptions about what your business is, you can decide what it needs to be to sustain itself. The modern Professional Accountant (SA) uses traditional financial reports and ratios, augmented with advanced analytical techniques, to help you determine how your business needs to change to remain operational.
Having determined how your “survivor” business should look, you must develop a plan to get it to that state. Professional Accountants (SA) can assist with the process of transitioning to your new business model. Their input ranges from sensible cash flow projections and financial management practices to identifying viable sources of funds, realistic business development goals, and optimal strategic decisions.
The UIF has started auditing companies who applied for TERS funding to verify they actually used their allotment to pay workers. This proves that successfully applying for funds is not the end of the story. A Professional Accountant (SA) is a trusted authority who gives weight to your application by ensuring all required information is included and correct. They also liaise between you and third parties, whether your bank or one of the many available relief programmes. Lastly, they keep meticulous records to ensure that your life-saving allowance is not reversed because you cannot account for its use.
The more capital a small business can conserve in the short term, the more likely its survival in the long run. Professional Accountants (SA) can ensure you derive the maximum value from scarce funds through prudent investments that protect against inflation and waste. This may even mean not investing at all based on their analysis of an initiative’s projected return.
Small enterprise owners often solve problems internal to their organisation. Professional Accountants (SA), however, are exposed to a wide variety of industry types and business sizes. As such, they may have come across or helped develop solutions to problems you have yet to encounter, have been unable to resolve, or don’t even know you have. This makes them a valuable resource to companies bent on survival.
After emergency cash hits your account, Professional Accountants (SA) are important thought partners in keeping you afloat. They can help you eliminate excessive costs and wasteful expenditure. They can identify contracts – like leases or loans – that are ripe for renegotiation. In fact, they can provide a myriad of options to help you run leaner than ever, improving on every aspect of your business.
Last but not least, the impartial support offered by a Professional Accountant (SA) is essential when your business seems to be spinning out of control. They will keep you informed and focused on moving forward instead of being immobilised by uncertainty. This will ensure you can navigate the rapidly changing landscape of government aid, get the resources you need to survive, and be ready when the time comes to rebuild.