The COVID-19 pandemic is one of the most serious challenges faced by every sector especially the financial sector. The impact of the pandemic will be large –having lower incomes, shutdowns in production departments, fall in demand to name a few and it will adversely affect the financial sector. The financial service sector and the accountants had to overcome significant challenges in responding to the COVID-19 pandemic and must be better positioned to thrive in a post-pandemic economy. Here is how the accountants can become more resilient:
Focus on Liquidity requirements
Finance departments have a major problem because cash pressures fall on them. Assessing available cash and liquidity is paramount. There need to be identifying opportunities to improve and protect the position of cash reserves or shortages, along with the liquidity position. Thus, accountants need to focus on improving liquidity in activities like accounts receivable and accounts payable, which will go a long way in conserving cash. To ensure strategic and dynamic decisions, the focus should also be given to the balance sheet.
Resourcefulness and intelligence
Certain leniency have been offered by the Securities Exchange Commission. A 45-day extension has been given to the periodic filings that were due on or before June 1, 2020, by the Canadian Securities Administrators(CSA). These include analysis reports, management discussion as well as financial statement disclosures (Ontario Securities Commission,2020). Accounting Standards Board also made certain modifications as a result of the current situation. To comply with the new leasing standards for entities, GASB AND FASB have proposed to postpone the dates. For reporting of rent concessions granted by lessors, IASB and FASB have proposed amendments. All these will have an impact on the business and process re engineering and these measures will affect the workflow of day to day activities and hence the accountants need to be active.
Think strategically to stay ahead like a business leader
Accountants should try to understand their role not only in the accounting aspect but also in the business aspect as well. In times of a crisis like this, it is essential to know how information travels from operations to supply chain management to financial planning. It will take great courage in confronting the coronavirus as a business leader, they must engage with their teams to empower their organizations to respond quickly and efficiently to the instability of the market while strategizing for long-term sustainability. Accountants should implement additional tasks and measures to pivot from being reactive to proactive.
As a result of the pandemic, the economy is still suffering. Over 30 million people unemployed over a six-week period and GDP slumped to 4.8 percent. To file periodic financial statements on time, accountants are relying on timely and accurate information flowing from the same organization’s other departments. Bottlenecks in the overall delegation of responsibility, disruption, and absenteeism in a company caused by the pandemic is affecting the accountants to have accurate information to rely upon.
The remote workforce has been the major change for accountants. Nowadays, meetings and other important works are done virtually and the most important part is broadband internet services have shown readiness. The pandemic is teaching everyone how to work from home rather than sitting in an office and doing work. To assist employee productivity, 70 percent of organizations use technology-according to the 2019 survey by Gartner.