How many times have you manually readjusted your forecasts this year thanks to COVID? No, really.
With the onset of COVID-19, this year has been – and the next few months are going to be – a whirlwind of change, forecast adjustments, projection overhauls, and amendments to budgets. For a huge number of accountants (many of whom are working from home), it means even less time to spend with their families.
Each time the lockdown is adjusted, or a new regulation is passed, businesses countrywide need to adjust, adapt, and strap in for a new ride. How do you ensure that you aren’t flogging a dead horse (your finance department) to ensure your stakeholders stay updated and that you plan for the (not-so-distant) future accurately?
The personal considerations of financial planning reflect on the business considerations, too. We require the same approach to shoring up our financial health in business as banks have been advertising to individuals for decades. Now it’s time to flex the muscle and make sure that business hasn’t forgotten about rainy days.
1. With sudden pressure on capital lines and liquidity, you’re probably doing some fancy footwork to stay afloat.
Start by ensuring you can access the funds you need, should you need them. OPEX and CAPEX may be under pressure, but it’s critical to ensure that you can adapt and overcome each time a COVID Curveball is thrown.
2. Emergency funding:
If you’re looking for investors or loans to fund a shortfall, make sure your current structures support a healthy lending process:
Assess your accounts, your cash flow, and your existing loan agreements – this sounds like a no-brainer, but so often we let existing legalities get in the way of unlocking the capital we need when we need it.
3. Revisit your monthly, quarterly or annual reviews and reporting
Your reporting may not give you the information you need to make decisions on the fly, and since most of the decisions we’re making right now are moving at 450kmph down the wrong side of a busy highway, it’s critical to ensure that your reporting and review processes are up-to-date, real-time, and easily adjustable.
4. Ensure compliance
The government cannot provide COVID relief if you’re not up to scratch on taxes, company registration, HR, tax, UIF and financial reporting. It’s crucial now to ensure that you are compliant and can deliver the correct formats, documents, and licensing to keep your business at the forefront of any potential relief schemes.
5. Adding work: budget regularly, cautiously, and accurately
This may make the accountants in your business cry a little, so ensure you have a solution that helps to reduce the workload as you add to the demands of budgeting and forecasting during this time.
6. Revisit your business objectives
Downscaling may be an option or diversifying your income stream, but whatever route you take, the outcomes for 2020 will be drastically different from your original company strategic objectives. Be realistic, and implement the processes that will help in a new environment, instead of pushing forward with old plans and goals.
7. Prioritise the real assets: your employees
With so much turmoil in world economies, employees know that their position is not safe. Try to find a place in your budget for additional income protection, medical aid, or insurance cover so that your business casualties are kept to a minimum. Consider adjusting your budget to ensure you stay liquid, and your employees do too.
8. Long-term survival needs better short-term thinking
The decisions you make now will impact your business in the long-term. Aim to ensure that your planning, budgeting, and forecasting processes give you the right data, to make better decisions, for a successful outcome once the dust settles.
Your financial planning and analytics solution will be your best friend through these trying times – use it, improve it, and access all its benefits so that you have a solid footing when you move forward (or sideways – whatever works!).
Contact Cortell to discuss how we can help.