The COVID-19 pandemic caused many businesses to temporarily close for a significant period of time. This has caused a great deal of financial stress. In order to survive this time and continue to thrive as a business, there are many steps that must be taken. The following are five important tasks to help you do this:
Bring Financial Statements Up to Date
All companies should have a clear understanding of their current cash flows, revenues, expenses, assets, and liabilities. This can help to understand where there are areas that you can cut expenses that are not considered “essential” at the moment.Â
Create a Forecast
After understanding your financial situation, project those numbers for the months to come. This can include the next month or the next 12 months. What will revenues and expenses look like over these periods of time. This allows you to have a better picture of what you can expect and how to have a plan.Â
Come up With Different Scenarios
As a result of the pandemic, the future is very uncertain and unpredictable. Once a baseline forecast is established, it is important to create at least three different scenarios of what your business can look like in the coming months. This includes a best-case, worst-case, and most-likely case scenarios. Be sure to come up with action plans for cost adjustments in the event of each scenario.Â
Communicate
Make sure you do not leave any customers, suppliers, employees, and creditors in the dark during this time. Communicate with them openly and frequently. Any misunderstandings in such a tense time can lead to unexpected staff turnover, angry customers, cost disputes, etc. Both good news and unfortunate news should be shared.Â
Keep in Touch With Advisors
Experts can provide you with helpful information for the future of your business. This can include attorneys, accountants, insurance brokers, lenders, etc. A fresh set of eyes can analyze your company and provide advice regarding what other businesses are doing to survive the pandemic. They can also provide information about recently-enacted tax law provisions relating to small business that may help you.
Contact our Firm
Werdann DeVito LLC is an experienced Certified Public Accountant firm serving clients throughout New Jersey with all of their financial needs. If you need quality assistance with accounting, tax, or consulting services, contact Werdann DeVito LLC today.