Chester & Cheshire

Covid-19: Key Steps for Accountants

Accountants - many of whom are either small practitioners or small firms - are SMEs’ (Small Medium Sized Enterprises) trusted advisors. The coronavirus crisis is a critical time for SMEs, where they’ll need all the guidance they can possibly get to navigate through the storm left by covid-19. Accountants in North Wales are supporting their local SMEs clients who might be struggling during the aftermath of this pandemic. Here are some of the recommended actions for accountants to support their struggling SME clients. 

Aid Options

Accountants should be aware of any and all financial and other forms of aid which have been made available by the government. All applicable and available aid should be used to aid your client’s situation. Take the time to identify clients who are in high risk sectors and those who would benefit the most from public support measures. Help them through advising on, and guiding through all the claims that are available to them. Identify viable options to diversify their business; access emergency financing provided by governments. If possible, consider renegotiating your fees and even introduce a more sustainable payment plan or schedule. 

Immediate Business Survival

Inform all SME clients of the immediate measures that might make the difference between being able to survive or total business collapse. Help them to implement these, for example:

  • Review and adjust their cash flow forecasts

  • Consider the business model

  • Access the reliefs on offer as soon as possible

  • Understand their supply chains

  • Communicate with their staff

  • Check their insurance

  • Renegotiate their payment terms

  • Continually monitor the situation

  • Negotiate with their debtors

  • Ensure that their financials are up to date

  • If all else fails, consider the insolvency options. 

Plan for the Medium Term

Many SME clients are likely to be in panic mode. As their trusted accountant, you should help them to avoid rushed emergency measures which could critically endanger the business’ medium-term viability. Help them to:

  • Start building financial reserves as soon as possible, in order to prepare for a possible new peak in coronavirus cases even after the current restrictions are lifted. 

  • Reconsider whether laying off employees is unavoidable. On top of having negative social and societal impacts, cutting down on the business workforce also contributes to a loss of key skills. This should be a last resort option only; as it is wholly possible that staff would prefer taking a temporary pay cut over redundancy. This could work in favour of the business as staff loyalty could increase and would enable the business to resume operations once the restrictions have been lifted.

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