COVID-19 has hit businesses hard and fast. Owners saw their small businesses closing down without notice, indefinitely. Many were not prepared to deal with the sudden closures, and those that were found their cash resources dwindling as the lockdowns and closures grounded the economy to a halt. Rather than focusing on growth and expansion, businesses had to focus on keeping afloat and simply surviving.
As your local accountant in Ryde and greater Sydney, we can recommend a few strategies to help your business survive post COVID.
Manage your cash flow
Managing cash should be the number objective. Cash inflows and outflows must be managed so that the business does not get short of cash. You need to stay on top of your debtors. Send regular reminders and chase up on outstanding debts. Incentives can be provided for early payments. Where clients themselves are experiencing Cash flow difficulties, you might consider negotiating periodic payments.
Creditor management plays an important role, where we need to make sure that there is sufficient cash to pay off creditors and for everyday operational needs of the business. Make full use of your supplier’s payment terms. If you have strong relationship with your supplier, you can negotiate a payment plan with them. You can also review supplier contracts and cancel any orders where possible.
As your local accountant in Ryde and greater Sydney, MYM Accounting & Business consultancy can help you cut down unnecessary costs. This is a critical step in managing cash flow, but quite often this tends to overlooked in the daily grind of managing day to day operations. Employees at all levels must be involved in helping the organization to reduce unnecessary costs. Time should be set aside to review business finances to allow for cash management efficiency.
Adapt new Technology
Businesses have turned towards technology to help them survive post-COVID-19 as general norms in the markets change. Your business can adopt cloud accounting to share information in real-time, without the added costs of investing in servers and other IT equipment. Cloud accounting allows the system to update from any location in real-time, also increasing business efficiency. Make sure that you have the audio and video communication tools that are required to keep your clients and employees connected and with the organization.
Digital marketing is an integral part of the marketing strategy for businesses; therefore make sure to invest in social media management and other marketing strategies as consumers spend a significant chunk of their time online. Aim for greater online presence and engage extensions and tools that allow you to automate certain online tasks and maintain your online presence with regularity.
Technology is a great enabler, and it works well to use technology to increase the productivity of a business so that costs can be reduced and business processes can be optimized. As your local accountant in Ryde and Greater Sydney, we can help you implement the best cloud based accounting system based on your needs and requirements.
Make use of the advantages of remote working
A key source of competitive advantage for any business is its ability to convert threats into opportunities. COVID-19 has been disastrous but it has brought about a host of different opportunities for businesses and individuals alike. One of these is the normalization of working from home. Work from home used to be a benefit offered by companies so that employees would remain motivated and could maintain a better work-life balance.
However, COVID-19 changed the common perception when all companies were forced to have employees work from home. They realized the benefits of allowing for remote work because it saves on costs of expensive office space, cuts down expenses on utilities and other everyday expenses that are related to getting workers to work from the office. However, working from home also means that human resource management strategies also need to be redesigned. It is important, to survive to post the pandemic that new key performance indicators are designed to measure performance and that employees are empowered to make decisions, that they probably could not in the pre-COVID scenario.
Employees are the reason why an organization exists, and it is the responsibility of the business to take care of their health. If employees are motivated, productivity increases automatically and the business environment also remains amiable. Mental and physical health of workers needs to be catered to. Mitigation strategies aimed at reducing the impact of COVID-19 and helping workers cope can be an effective means of ensuring the health of workers.
Government Grants & Incentives
Economic relief packages are available for businesses that are striving to stay afloat. Make sure that you are aware of what packages apply to you. An accountant tends to be aware of the departments that offer these packages and which relief packages would apply to your business. But at the same time make sure that you understand that the packages offer temporary relief and that you do not plan any long term expenditures based on the income from the relief package.
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