How do you focus on crisis management and business continuity when the health and safety of your family, friends and communities are at risk? It’s a question business leaders worldwide are having to grapple with every day during the Covid-19 pandemic.
Protecting loved ones is paramount but it’s also important to maintain business operations to keep people in jobs, retain customers and continue with some semblance of normality.
To lessen the financial impact of the pandemic and emerge stronger when it passes, companies of all sizes need to act decisively to deal with disruption, based on trusted sources and sound advice.
Independent accounting and consulting firms within Praxity Global Alliance are helping businesses step up to the challenge by providing essential information and advice on government support, tax relief, crisis management and business continuity.
Firms across the Alliance have developed specialist teams and dedicated resource centres to help clients keep their businesses running as smoothly as possible in the weeks and months ahead. Specialists are working around the clock to provide economic analysis, tax and regulatory updates and pandemic-related guidance to help business leaders make informed decisions.
One of the most comprehensive Covid-19 response programmes is that of Mazars, which operates across six continents. Mazars Group has convened its Crisis Global Taskforce, which has set clear guidelines for its international partnership to sustain service and support clients throughout the crisis.
Margaret Laidlaw, Mazars’ UK Head of Privately Owned Business, identifies the importance of “giving our clients clarity, guidance, and offering support when they most need it”. She adds: “Teams from across the business have quickly become a critical resource for clients in a time of deep uncertainty: we’re operating an extensive online hub of information and guidance and running multiple webinars each week, as well as maintaining personal contact with our clients throughout.”
The Praxity response is truly global.
In the United States, Mazars USA and other Praxity member firms including Aronson, BKD, Dixon Hughes Goodman, Moss Adams and Plante Moran have launched resource centres focused on providing much needed advice and guidance on the US$2.2 trillion CARES Act – the largest emergency aid package in US history – which provides grants, loans, and other economic benefits to individuals, private business, and non-profit organizations.
The Act includes emergency grants and a forgivable loan programme for companies with 500 or fewer employees. It refines the US$100 billion Families First Coronavirus Response Act (FFCRA) bill passed a few weeks previously, which sets out provisions for emergency paid leave for employees.
“It’s been crazy,” says Jason Drake, Partner and International Practice Leader at Plante Moran. “We’ve been really, really busy helping our clients understand what incentives the government is offering and what they qualify for.”
Due to the speed with which the US legislation has been introduced there is no extra guidance from federal government so accounting professionals are having to quickly pinpoint who is entitled to what, and work with attorneys and lenders to provide expert advice. The situation is complicated by the fact it’s up to individual states to determine quarantine measures which effects how businesses are covered by some incentives.
Helping businesses deal with disruption
As well as guidance on tax breaks, Praxity member firms are providing essential advice on how to keep businesses running during and after the pandemic.
“A lot of clients never expected something like this to happen,” Jason Drake says. “It started with clients asking ‘what should we be doing to prepare?’ and now its switched to ‘should we continue with operations or should we close operations’.”
SMEs in particular are seeking help, not just to adapt to the different working patterns but to survive potentially catastrophic falls in income and loss of clients and suppliers during the coronavirus outbreak.
As part of a comprehensive Covid-19 response, firms such as Aronson and BKD are providing regular webinars on issues such as Small Business Administration disaster loans, and cash flow projections and business planning respectively.
Support is also being provided to help companies gauge their pandemic preparedness and ensure measures are in place to create a clear path to recovery. Plante Moran, for example, has developed a complimentary tool to help business leaders in different sectors rate their ability to:
- Create and execute a decisive crisis management plan
- Optimise cash flow and liquidity quickly
- Manage increased cybersecurity threats to business continuity
- Develop and execute contingency plans for supply chain and operational disruptions
- Demonstrate exceptional leadership and restore a sense of control
- Evaluate and set up remote IT support structures throughout operations
- Navigate tax and regulation changes
Once the assessment has been completed, Plante Moran consultants provide advice on the key areas that businesses need to focus on such as how to how to stabilize your organization today in order to survive the coming weeks of the crisis.
“There are lot of companies affected. They are having more issues with this due to forced closures,” Jason says. “Do you have a position that can be done remotely? Do you lay someone off in the hope they are going to come back or do you keep them employed? If you keep them on, how do you fund that? Many companies are also having to deal with the challenge of clients and suppliers closing down, so they cannot work.”
Support around the globe
Similar challenges are being faced by companies around the world. In response, Praxity member firms are providing support to ensure clients have access to up to date information and expertise wherever they do business.
The support ranges from maximising the reliefs available, adjusting cash flow forecasts and addressing supply chain issues to identifying options to diversify business.
For larger, multinational clients this includes providing advice on how to benefit from complex tax relief across international borders. Tax administrations globally have introduced substantial measures to support companies, employers and the self-employed affected by the coronavirus outbreak. These measures are generally aimed at preventing hardship for individuals and boost cash flow for businesses. They are outlined in a report by the Organisation for Economic Co-operation and Development.
In Australia and New Zealand, William Buck has assembled a team of specialists to advise on Australia’s estimated AUD213.6bn Federal economic response package as well as each of the State packages, and New Zealand’s economic response package and wage subsidies.
The Australian Government package, for example, includes the JobKeeper Repayment incentive. As the most significant tax measure announced in the last 20 years, the JobKeeper Repayment is expected to provide a subsidy of $1,500 per employee, per fortnight to businesses that have reported a significant downturn in revenue. Designed to encourage businesses to keep employees on their payroll, the measure will come as welcome relief to many that had plans to stand down employees.
The firm is also actively helping clients throughout the region with a range of practical business issues including innovation and hibernation strategies, contingency planning and business recovery measures.
To help clients cut through the raft of information available, William Buck has developed a COVID-19 Resource Centre with updates on the government assistance as well useful links and a video series on the government tax breaks and other measures, and is sending clients a weekly checklist of new government announcements and appropriate actions.
Nick Hatzistergos, William Buck’s Chairman and Managing Director, says: “Our clients have really taken to the Weekly Checklist. With so much information out there, they appreciate having a short concise list of actions they can undertake immediately. Our aim is to empower them to take the practical steps needed to see this through.”
In the UK, Mazars and other Praxity member firms are helping businesses understand and benefit from the UK government’s new Coronavirus Job Retention Scheme. This pays up to 80% of salaries of employees who might otherwise be laid off, up to £2,500 a month. For the relief to apply, the employee must be designated as a “furloughed worker” which means they are kept on the employer’s payroll, rather than being made redundant.
Mazars is also providing HR support in the form of a short-term financial outsourcing team to help companies manage financial functions during peak staff absence due to Covid-19. In addition, Mazars has established a Business Continuity Pandemic Resilience (BCPR) programme to help address key issues during the pandemic and beyond. Under the programme, a specialist team has been set up to help business leaders to:
- Ensure management is aware of business-critical process, people, skills and minimum staffing arrangement through organisational Business Impact Assessment
- Establish an emergency preparedness planning and communication strategy
- Prepare for employee absences through business continuity planning such as remote working, telephone or video conferences and provisions for employees with children or unwell adults at home
- Reinforce internal peer support or counselling to assist employees with health concerns
- Ensure workplaces have adequate supplies of cleaning and hygiene products in accessible and visible locations with signage as required
- Create awareness among employees, customers and suppliers of a pandemic continuity strategy and alternate working arrangements and how they are involved
- Monitor official information sources, advice and assistance from the government, health and other relevant agencies and watching out of any rumours or false news spreading within the organisation regarding a pandemic/potential pandemic outbreak
- Update staff on recent developments on the pandemic/potential pandemic outbreak through newsletters or other communication channels
In many regions, Praxity member firms are collaborating to help clients through the crisis. In the UK, specialist independent accounting firms have been sharing ideas and best practice to ensure businesses and individuals have access to comprehensive support when and where they need it.
Albert Goodman has created an information portal and runs regular webinars to update clients on latest developments, Shorts has launched an information hub with daily articles and guides while Rouse Partners is providing advice for employers, employees and the self-employed on how to access financial support and benefit from exemptions and grants.
Rouse Partners has published a step by step guide to help companies manage their pandemic response. This includes useful tips on supply-chain management, funding and cash flow, and HR and insurance policies, as well as advice on complying with new audit guidance. The Rouse Partners team are also planning to launch further tools, FAQs and checklists as government initiatives are rolled out.
Similarly, PM+M has created a support hub with guidance on available financial support as well as help with issues such as VAT and commercial rent deferrals, tax filing extensions and support for the self-employed. In addition to providing practical guidance through webinars, PM+M and fellow Praxity member firms are providing moral support as trusted business advisers – a key strength of accounting firms and the Alliance itself.
Jane Parry, Managing Partner of PM+M, says, businesses are “facing challenges that we could never have dreamed of just a few short weeks ago”, adding: “The key is for the business community to stay calm and source the most accurate advice possible. Social media is awash with ‘fake news’ and mis-information, so our aim for the hub is for it be a trusted platform where people can access accurate guidance which they can take away and implement.”
These are unprecedented times. The challenges facing employers and employees are immense but so too is the support available from independent accounting and consulting firms within Praxity Global Alliance. Globally, member firms are working harder than ever to collaborate and provide guidance to help businesses get through the crisis, and hopefully, emerge stronger and more resilient.
This article was written for Praxity Global Alliance, the world’s largest alliance of independent accounting and consulting firms.