The country is facing an unprecedented time due to the COVID-19 (coronavirus) outbreak. While many companies are facing challenges, small businesses are feeling the impact more than most, as states continue to decree restrictions on employers, workers, and citizens. The effects of the coronavirus will be felt now and for years as the economy attempts to recover, and this will have a direct impact on your business finances and accounting operations. As a business owner, you may be seeking help and valuable insights on how the coronavirus pandemic will impact your near-term and long-term accounting and finances.
How the Coronavirus Is Impacting the Economy
The long-term implications of coronavirus on the economy are unknown. There is much uncertainty, as is seen in the volatile stock market. Additionally, many states at this point have issued the closure of non-essential businesses (such as restaurants and bars), which includes many different types of small businesses. Others have had to limit hours of operation or switch to a new model, such as restaurants being available for drive-thru or delivery only.
Further, with everyone staying home, consumer spending, outside the grocery and healthcare markets, has taken a nosedive. For those businesses that depend on travel, tourism and event dollars, they are now facing a full stop on incoming revenue.
The global economy will take on a new shape in the coming months, and right now, there isn’t enough data to determine how it will shake out on the macro-level. On the micro-level, your small business is likely feeling some major pains.
Near-Term and Long-Term Impacts on Accounting
There are several key elements to the financial aspect of your business, some of which are grinding to a halt right now. Here are some considerations:
- Payroll: If your business is shuttering or laying off workers, you’ll have to immediately make changes to payroll, which could be complicated if you handle it yourself. For those employees being furloughed, you may be offering to pay them out any accrued paid time off (PTO) or providing some type of severance. Some companies are continuing to pay full-time employees who are furloughed, which also changes your payroll workflows.
- Tax deadline: As of now, the IRS has not extended the deadline to file taxes, which is still April 15; however, small businesses that owe less than $10 million will have 90 days after the deadline to remit payment.
- Budgeting: Your budget for the year has now been forever altered as a novel virus is not a reasonable variable that you would have accounted for in your process. Lots of money allocated for certain things is now not applicable, such as work travel, conferences, events, and recruitment. It’s time to reassess your 2020 budget and move money around to care for immediate and future needs. Your budget priorities are going to be changing dramatically so you can stay afloat.
- Government relief: The government has taken steps to help protect small businesses. The income tax deferment plan has been confirmed. An employer tax credit bill has passed the House, which would provide for the paid sick leave requirements. Low-interest loans backed by the Small Business Administration (SBA) are being made available.
Do You Have the Capacity to Handle Accounting?
Another real consequence of the coronavirus pandemic is that those businesses still running are at capacity because they are a necessity. Local grocery markets are doing all they can to keep shelves stocked. Freight and logistic companies are working to keep the supply chain healthy. It’s an all hands on deck effort, which may leave financials outside these priorities.
To ensure that your accounting isn’t neglected and that you are taking advantage of any stimulus or proposed support, it may be a good idea to outsource your accounting at this time. By receiving expert help with your finances, you can focus on keeping your business running and serving the needs of your customers.
Alternatively, you may have cut down on your full-time employees and had to furlough or lay off your accounting staff. If so, keep financial obligations from being disrupted by partnering with a firm to handle your accounting for the near future.
Supporting Small Businesses
As a partner to small businesses like yours, we care deeply about the impact of coronavirus on your company. During this time of uncertainty, you may have many questions or need QuickBooks consulting or general bookkeeping to keep your business moving forward as effectively as possible. We are in this together, and if we can help in any way, please contact us.