Covid19 also famously known as the Corona virus has wreaked havoc worldwide. With more than 400,000 cases in the United States of America alone, our country is struggling to get through with the after-effects of this pandemic. In the stock market, Dow Jones fell more than 10,000 points in a month which is its worst fall since 1987.
Our economy and business environment are now under distress and business owners are re-evaluating their methods of running the business. Some owners have had to make difficult decisions at this time because of the loss of revenue. But in all this situation, there’s a silver lining!
If you wish to make any reasonable decisions during such a time, it’s best to get your accounting in place. Yes, we know that’s the place that doesn’t get its attention unless you need to file taxes. How about you utilize this lock down period to get your back office accounting fixed. There are various ways you can emerge out of this crisis:
Now you don’t have any control over this virus that’s affecting your business with each day. But you do have control over the impact it can have on your business. All you need is a calm mind that’s ready to plan and make smart decisions.
Here are some ways you can work on your accounting:
Let’s face it: Most of the business sector is down as demand cannot meet supply. Imports and exports have also taken a hit. In such times, we are looking at a recession. But does that mean we sulk and wait for the end?
No! While we agree that the volume of transactions has gone down resulting in low revenue, there’s still hope. You can utilize this time to make your business look investment-friendly.
Are you wondering what investment-friendly means?
It’s simple. Once this situation gets back on track, raising funds will be very difficult. For a business, a good source of working capital is important to run the business smoothly. Hence to ensure that you don’t become ANOTHER victim of the virus after effects, we can work on making your business investment-friendly.
Remember one thing; There is a lot of money in the market but they will only go to people who have the will and the vision to succeed. You can make your business look reliable by following a series of 4 clean up events:
As we mentioned above, clearing the historical financial data is important if your business wishes to be investment-friendly. This would mean checking the following items:
Your first task would be to organize your cash flow as per 3 sections i.e. operations, finance and investments. Kindly check for any past errors or missing entries. Also, keep a tab on the current cash flow statement to understand if you’re falling in the red. If yes, then you might have to borrow money to survive this situation.
Next, keep a tab on your balance sheet that includes your assets and liabilities. Now we all know that the balance sheet, in general, must balance. But due to COVID-19, the times are tough. You might end up writing off certain assets and this might affect your business. Hence keep a regular tab on this statement too.
Finally, check your income statement. In this lock down, revenue has fallen but certain fixed & variable expenses continue to be incurred like rent, advertising, salaries and many more. You can review these income and overhead costs to find where you can scale back and save money without affecting your business.
If you read the above point, it is clear that checking and reconciling historical financial data is not that easy. Sometimes, you might find missing records, invoices, bills, statements, etc that can hamper your records. What can you do at such a moment?
You don’t have to worry about remote access and who gets to see how much of your data. Here are some steps to follow while using such accounting software:
After all this, our final suggestion for you during times of distress caused by Coronavirus is to outsource your accounting to experts.
Once you have moved your accounting systems to cloud-based, you can outsource your accounting partly or completely to experts. We say this because of various reasons:
With the Coronavirus affecting businesses worldwide, opting for an outsourced cloud accounting service will give you multiple benefits. This service gives you a virtual accounting team that is available for you at any part of the day.
Finally, if you choose to outsource your work to us, we will give you a benefit that none can provide. We will give you the freedom you need to focus on running your business without an ounce of worry towards accounts.
You’ll always know that your books and records are safe and updated. You’ll have access to your financials whenever you want and our team of experts will be there for you to help you make the best financial decisions.