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10 Ways Your Bookkeeper Can Help You Through Covid-19

by Mar 5, 2020Bookkeeping

Covid-19 has affected the social, political and economic institutions of the world. Its impact can be felt across continents. At such a time, it is important to contain the human and economic impact of the pandemic. As per the statistics, if it goes at the pace it is at, 85% of the small and medium-sized businesses will run out of cash in 2 months, and will run out of complete funds in 3 months. But as they say, all hope is not lost. A healthy business runs on thorough logistics, solid cash management and an effective planning of the future. It is a bookkeeper, who can put all these requirements together to help your business sail through during these uncertain times.

Having an effective bookkeeping strategy in place will help you to stable your cash flows, make your financial status immune, reduce business related risks and help you with future continuity plans. There are various ways, which if done correctly, can help your business in combating the economic impacts of Covid-19.


Bookkeeping Strategies to Help You in Combating Covid-19:

A bookkeeper understands the foundation on which your business is built. The combination of financial efficiency and perfect business logistics that they bring to the table can help bring your business afloat during these times. Here are some bookkeeping strategies that you can follow to mitigate your losses in the wake of Covid-19:

  • Be Updated with Financial Documents: 

Your financial documents will help you chart the present status and future projections of your business. You should utilize this time to draw updated and accurate statements and documents to avail tax benefits and the ongoing employer credits.

  • Draw an Estimation of the Financial Impact: 

With the absence of direct earnings, it is time you sit with your bookkeeper and analyse the financial projections that you can draw at this time. This will help you to reimagine your business, in these changed scenarios more efficiently.

  • Re-strategize your Budget: 

With the complete abruption of smooth cash flow in your business, it is time you get on the other side of the spectrum and delegate your business smartly. Rethink your budget and draft a new one keeping the current challenges and the future needs in mind. Your bookkeeper will give you the right direction to chart a budget that is realistic and achievable.

  • Improve the Payables: 

It is time you get to the basics and see how much funding you need in place to be able to sustain your business and for how long. You should ensure that your own cash is viable at all points. Which also means that you should exclude the budget for any cash ins and outs that might not be paid. Your bookkeeper will help you chart a healthy list of accounts payables.

  • Employment Tax Considerations: 

For all businesses with employees, there are multiple ways that you can ease the burden of funding wages and employment taxes during these times. Federal compensations, employee retention schemes and easing payroll taxes for starters, can help you during these times. Your bookkeeper can help you strategize wages, staff costs, healthcare management and leave entitlements as well as get you maximum federal benefits.

  • Think like a CFO: 

It is time that you assess and analyze all aspects of your business in terms of its financial efficiency and viability. Just like a CFO, you should see what parts of your business are favourable to your future growth, and what is a liability. Take this time to assess your financial burdens, and find the correct ways to ease them out.

  • Revisit Potential Investments:

Every business will need a catapulting of capital after the pandemic ends. You can use this time to draft potential investment proposals with your bookkeeper and draw strategies to help you gain in the future. Take your time now to be a step ahead of your competitors and start your business with an added edge.

  • Manage Your Accounts Receivables: 

At a time when the cash flow is low there are chances that your receivables can be impacted greatly. You should strategize with your bookkeeper to make a more rigorous plan of creating a smooth channel for your receivables. So that your legitimate cash flow is not blocked and you do not face a crunch.

  • Revisit Your Fixed Costs:

There are many expenses in a business that we consider fixed and important. Now, is the time to reassess what is integral and what can be a variable expense until this phase passes. Your bookkeeper can help draw that integral distinction between what expenses are important for your business at this time and what isn’t.

  • Think Beyond What You Have: 

This is the time to outsource and cut costs. Getting professionals who know their skills and are committed to helping you in reaching your goals should be your next step. You should choose outsourced bookkeeping and accounting advisory over having a full-fledged accounting department. Not only do you get a proactive team of experts, but you can save majorly on your expenses. Build a virtual team!


Respond to Immediate Challenges with Effective Bookkeeping

This is the time to work together, work efficiently, and benefit in unity. Your bookkeeper and effective accounting strategies can help you in mitigating Covid-19 and not just resolve its economic challenges but come out much better when all of this ends. Seeking what should be your concerns immediately and how should you manage your cash in the long-term are key concerns. With the right bookkeeping knowledge, you can draft strategies and gain maximum federal tax benefits as well.

It is time, we all come together and fight this pandemic and the challenges it brings with it, heads on!

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