Accounting Advice for Small Businesses Impacted by Covid19

Accounting Advice for Covid19

November 17, 2020

COVID-19 has spread shockwaves in more than just global healthcare. With gyms, pubs, restaurants, schools and etc closing down how to protect one’s business and retain one’s employees has become a difficult job. Employers will not want to willingly make employees redundant but with falling demand from where do, business owners bring the cash to propel their already sinking businesses? It is at such times that financial management is even more crucial as reports are more than just pieces of paper. Consider your own health report, for instance, it gives you an idea about your physical health and aids the doctor in making a diagnosis. Well, the same applies to your books of account. They would indicate the financial health of your business and at such a time this would be a lifesaver to prevent your business from being bled dry by unnecessary costs.

Doshi Outsourcing is working keenly to assist its clients to continue on the firm ground during this pandemic situation. Based on our analysis we have come up with a few but integral pointers that should help you keep up the smooth sailing till the pandemic finds some semblance of closure.

Work on what you already have

Good stock management perhaps was never this important. Make a thorough inventory of what you already have and remember that demands are going to be done for some time so buying too much is not going to be of much use. Work out what is more likely to perish as this is what you need to get rid of faster to avoid an additional loss. Perhaps you could work on promoting these items with a limited time scheme to make buyers interested in their advertised exclusivity.

The quantum of orders too would need to be reduced especially when finding it difficult to sell. Sticking to the basics might come in handy here. As for the stock you already have or is slow to move, promotion is the ticket to reduce it as unless customers don’t know what is out there how would they purchase it.

Get back that cash

Debtors hold with the cash that could have aided your cash flow. Thus, this might be the time to give them a few rings for payments. If they need more time due to cash flow issues you might have to be persistent in your follow-ups. That is why it is better to invoice as soon as the product is sent. Check out the older debtors as well. It makes sense to encourage customers to make upfront payments and only provide commissions to your sales team when cash comes in. You need to avoid cancellations as well and so you might want to update your cancellation policy.

Be careful when you spend

Careful spending is the need of the hour as you need to conserve the cash at hand in order to manage your cash flow better. This is a time when unnecessary expenses are at their best, avoided. Thus, keep away spending on what is not of immediate requirement. The same applies to the purchase of stock or improvements and repairs to your premises.

When you simply just have to pay

Paying your creditors is an inevitable process, it’s a thing that has to be done. Perhaps if you are not having cash at hand you can work upon extending your payment terms or requesting an instalment approach. The same can apply even to tax authorities. Check to see when orders can be cancelled so that if something is not needed you can get out of mandatorily stocking it. If that can’t be done perhaps you can at least delay the delivery.

Outsourcing – the way forward

Previously employers were hesitant with the word ‘outsourcing’. Come to think of it, how many businesses have worked ‘remotely’ or ‘from home’ had it not been for this pandemic? The COVID-19 virus has taught the world to change the way it operates the running of a business. Thus, embracing cloud accounting has been just one of the few changes businesses as well as accountants have to face. Doshi Outsourcing has been perceived to be a trusted accounting outsourcing partner with offices based in London as well as back offices in India. Indians are known for their proficiency in numbers hence, as far as accuracy goes, you need not worry.

The cross-cultural elements also come in, for instance, would the same work ethic be shared? The proof here will be in the pudding as our assurance is quality work delivered on time. Communication should not be an issue as we are only a phone call or email away. Our staff is trained in English and share the work ethics and understand compliances as well as any UK accountant. But why not trust a UK accountant instead? With Doshi Outsourcing you need not worry about your clients or private business documents as we will sign an indemnity contract with you. Thus, you will get the best quality services but at a fraction of the cost.

Furthermore, our world has changed drastically over the past few months. Technology and remote working have now become a trend. Businesses will find even more competition as the days progress and it appears that now for businesses to succeed, they need to be more receptive to the global market.

Interestingly, many businesses have only recently realised the importance of having an online following and in increasing their online sales. When the customer can no longer go to the shop the shop or product needs to come to the customer. Hence, the advent of the virtual world.