In general, retaining an accountant is often undervalued, especially for SMEs with a smaller operating budget. As such, outsourcing to an accounting service firm is seen as an expensive overhead. With this usual mindset, you may be tempted to let go of your accountant in this pandemic as cash is ever tighter.
However, this is a very costly mistake because you need an accountant more than ever to surpass this crisis. After all, accountants are not just for tracking your expenses, bookkeeping, or filing your tax returns. Take note of the five reasons why you need this ally on your side during the coronavirus pandemic:
Help You Navigate More Complicated Taxes
It must be noted that the first lockdown in March 2020 started in the middle of the tax and audit season. Hence, the pandemic’s wake altered numerous regulations, such as percentage deductions, certain exemptions for special industries, and even later due dates for payments without the usual sanctions (see BIR Revenue Regulations for the full list). So, how do you know which statutes and regulations in the various BIR memorandums apply to your industry? You need help from your accountant.
With a leaner budget due to the coronavirus, you need a CPA’s insight, even more, to legally navigate exemptions, tax breaks, and deductibles. All of these can reduce your tax obligations. On top of that, your accountant can help ensure you comply with statutory requirements of the BIR and assure your taxes are paid promptly. As a result, you can avoid stiffer penalties and fines, which you certainly don’t need now as they are an added expense.
Make Sure You Avoid Poor Financial Management
You need your accountant to keep the business running continuously despite the economic uncertainty. Losing your accountant in this pandemic means you must tread confusing figures on your own. Since you already have so much worries on your plate, you must rely on your accountant’s expertise to ensure that you will have sufficient funds for the next couple of months’ payment cycles. This service can spell the difference between keeping your business open versus dissolution. Thus, you need your accountant even more to:
- Ensure liquidity via collections
- Apply for loans to cover expenses
- Balance current funds to disbursement priorities
- Meet payable deadlines
- Monitor correct payroll
Remember, whether it’s pandemic time or not, the reason most businesses fail is poor financial management. It will be even harder to bounce back when you don’t have a clear picture of your financial position. Thus, an accountant is critical in help insulate you from shocks of dropped revenues and delayed payments. With an exceptional accountant on your side, you will do more than just service your debt, pay your workers, and subsist on dismal returns, praying you don’t run out of cash. Instead, you can execute a solid plan to move your company forward.
Provide Strategic Guidance on Government Measures
A lot of emerging issues and complications in the business environment resulted from the pandemic. Since the world had to deal with a novel virus, you had to face many challenges that you have never encountered before. You may have had to deal with the following because of lockdown:
- Suspended production
- Temporary closure of business
- Reduction of the workforce
- A massive decline in sales
- Work from home setup for staff
- Delays in supplies
As such, you must now depend on the advice of your accountant to deal with the implications of various government measures on your company’s fiscal health. Though the government wanted to minimize the spread of contagion, it resulted in catastrophe in the economy. Therefore, you need your CPA’s guidance even more to navigate through financial uncertainty resulting from the coronavirus mayhem.
Offer a Plan For a Successful Recovery
You must rely on the advice of your accountant to plan for a successful recovery. An accountant can help you minimize risks to avoid possible bankruptcy. This professional is your ally in reviewing various incentives, schemes, or tax breaks that may be relevant for your business. These measures can:
- Help ease cash flow
- Save more money
- Provide capital injection
- Lessen tax dues
These will help in your recovery efforts to ensure you can continue your operations amid the various challenges. Remember, a business person who understands the company’s financial positions will be more successful. After all, there is a very clear correlation between sound financial planning and hitting business targets. In addition, when your business has a detailed financial recovery plan, thanks to your accountant’s input, you can alleviate worries and find solutions to your issues.
Assist in Spotting New Opportunities
Finally, don’t let go of your accountant because this person can help you analyze situations and evaluate growth opportunities. For example, now that the pandemic happened, your business may have had to pivot to survive. Thus, you have to develop plans that require forecasts and projections to ensure that they work. Your accountant can help with that and ensure you’ve got enough capital and funding in place to make your plans come to fruition. Besides, they have experience handling numerous businesses, so you can count on their commercial insight.
If you need help during this financial crunch, don’t hesitate to contact our team. Our roster of CPAs has undergone rigorous training, coupled with decades of experience. As a result, we have the expertise to help you out in these trying times. Apart from accounting, bookkeeping, and payroll services, we can help audit your books and ensure your business is more tax-efficient in this pandemic. So give us a call for a free 30-minute consultation.
