2020 was a rough year for U.S. businesses, and the effects of the pandemic will have long term ramifications. By the end of 2020, Yelp Data suggests that 60% of business closures due to the pandemic were permanent, and a Facebook study estimates that by the end of the year that 31% of U.S. small businesses were non-operational due to lockdown restrictions.
With businesses suffering reduced cash flow and revenue, office workers transitioning to work at home, managing workforce needs through furloughs and layoffs, and many businesses taking advantage of the ever-changing PPP Loan program, it helps to have accounting experts in your corner to help navigate 2021.
Since accounting firms touch so many different industries and businesses, they are in a prime position to help similar businesses employ strategies to help them recover from the pitfalls of the pandemic.
A joint survey by CPA.com and Bill.com asked 1,700 professionals who employ client accounting services on how they benefit their business. The results showcase the potential of the transformative impact of outsourcing services for companies of any size who suffered a downturn due to COVID-19:
Saves Time: 80% of the respondents say that outsourced accounting services provide them more time to focus on their business.
Easier Accounting: 68% said implementing best practices from their outsourced accounting firm made their accounting easier.
Increased Profits: 28% report that following advice from their outsourced accountants resulted in increased profits.
Leverage the deep pool of resources a CPA firm can provide your business to emerge from the pandemic in a strong position.
Areas in Which Outsourced Accounting Can Help
Save money and time to focus on what matters
Now more than ever is when your leadership needs to be focused on strategy and leave the minutiae of accounting and bookkeeping to someone else. An accounting firm can oversee items that previously took up a chunk of your time including accounts payable and accounts receivable, invoice payments, and payroll.
Manage your PPP loans
The details of loan forgiveness under the PPP can be a little unclear for some. Plus, it’s not an all-or-nothing—you can have your loan only partially forgiven. Loan reduction can happen by the dollar if you use the loan other than how lawmakers prescribed it.
Accounting firms are highly specialized in managing the terms of PPP Loans as they manage them for multiple businesses and are up-to-date on regulation.
Manage your cash flow
Financial recovery requires strategic planning and spending.
An accounting firm will have a view of operating costs, sales, overhead, assets, liabilities, inventory, and the cost of human capital. By keeping a view on recurring expenses and projected income, while factoring in KPI thresholds and scenario planning for the upcoming months and year, they will be able to create rolling financial projections and set spending limits on low-priority items.
When you’re looking to trim the fat, it will be essential to have all of these items prioritized, so when it’s time to go to the chopping block, you already have contenders lined up.
Revamp your processes and procedures
As you’re looking to learn more from your financial data and pivot quickly to major shifts in the markets, spreadsheets and manual data entry simply won’t cut it. It helps to have bookkeeping and accounting software in place to ensure your records are meticulous and error-free.
Automated accounting platforms can also supply your team with financial reports and checks and balances, such as:
360 View of Accounting Data: View real-time procurement, invoicing, and cash flow simultaneously.
Improve Controls: Systems that include audit tracking and financial oversight to reduce financial errors and ensure the accuracy of all accounting data.
Financial Planning: Data from various operational components of the business provides business cases for cash management, borrowing, restructuring, equity raises, etc.
Real-Time Compliance: ERP reporting provides an investigative interface that helps ensure tax compliance and remediate issues.
Accounting firms can directly oversee the implementation of automation and stronger financial processes, or work with your business leaders on a consultation basis.
Get your tax strategy in order
2021 is not a good year to miss out on relevant tax credits, and COVID-19 related tax credits. The FFCRA provides businesses with tax credits to cover certain costs of providing employees with required paid sick leave and expanded family and medical leave for reasons related to COVID-19, from April 1, 2020, through December 31, 2020.
Aside from this, increased regulatory scrutiny over tax disclosures, account balances, and close cycles have put pressure on organizations to ensure their taxes are airtight. Meanwhile, many organizations without a tax advisor in their corner are not taking full advantage of all the various tax deductions that are available to them.
The crunch to get your taxes filed by April 15th (or later in the fall if you plan to file for an extension) always tends to get stressful. A CPA firm will make sure your business tax return is filed properly, and you’re claiming all the tax credits your business is eligible for.
California businesses look to Greenough Group to manage their COVID-19 loans, accounting, and expenses
The COVID-19 pandemic has a lot of moving parts into 2021, and financial policies are continually shifting. Lockdowns have returned in full force, and the vaccine rollout timeline is still up in the air.
Along with your pre-existing business loans, you may also be juggling your Paycheck Protection Program loans or SBA Disaster Loans. With so much financial uncertainty, having a part-time accountant or CFO with decades of experience provides much-needed stability.
Financial and accounting oversight and management
Managing employee layoffs, furloughs or salary reductions and the associated finances
Managing finances to meet the requirements of an SBA Disaster Loan or PPP Loan and The CARES Act
Uncover and implement novel ways to cut your expenses
Documenting all loan expenses
Fielding your employees’ questions about financial matters
Updating employees on the rapid changes to the laws
Contact us today for a free consultation, and learn how we can help your business survive and thrive beyond COVID-19.