If you are like most businesses, you have been affected by the COVID-19 outbreak in ways you never could have imagined. Hopefully, your employees and their families have remained safe and healthy. Even if you are fortunate, the economic effects have been significant, as sectors of the economy have slowed down or ground to a halt amid stay-at-home protections, closings of non-essential businesses, and other measures implemented to slow the virus’s spread.
With business slowing down for so many, it may seem less urgent to keep your financial records current. But it’s more important than ever to stay up-to-date so your business has the best chance to stay healthy, too. Here’s how you can stay prepared during these unprecedented times.
You have certainly heard the news about the effects of the pandemic on employment numbers. If you’ve been struggling with how to keep your employees on payroll, there are resources that can help. The federal government (as well as some states) have passed a number of relief measures intended to help businesses stay afloat and keep workers employed through the shutdown.
The most well-known of these is the Paycheck Protection Program (PPP). Administered by the Small Business Administration (SBA), the PPP underwrites banks to provide forgivable loans to businesses that are intended to help companies keep their employees during the shutdown. The immense popularity of this program has meant that the program was allocated additional funds so it could provide assistance to companies that had not yet applied. Check with the SBA or your local bank to find out the current status.
What if your employees are sick, or required to care for a sick family member? Under the Families First Coronavirus Response Act (FFCRA), many employers are required to provide paid sick leave. To help with this new requirement, employers can reduce their payroll tax payments as an offset. If you do not have sufficient funds to cover leave pay, you can request expedited payment from the IRS.
Payroll software like CenterPoint Payroll from Red Wing Software can also help you manage employees and give them needed flexibility during the pandemic. For example, CenterPoint Online Time Clock lets employees enter their hours from any web-enabled device, while Red Wing Software Cloud Services make it possible for employees to access all of the necessary services from the comfort of their own home.
Payroll is not the only challenge in the current environment, and companies need to stay especially vigilant about the state of their finances. Most importantly, routine activities that are normally taken for granted — like paying bills — take on additional risk when “the normal course of business” no longer applies.
Focusing on cash flow becomes paramount when you are more likely to witness interruptions to income. You may have already experienced disruptions to your supply chain or a reduction in sales. The accounting firms recommend monitoring accounts receivables very closely. Remember that you’re not alone in facing these cash flow and credit struggles. Your customers and vendors are also in the same boat, and are more likely to take longer to pay, if they are still able. The more prepared you are, the better you will be able to weather hits to your revenue.
The right accounting software can make these tasks easier and help put you at ease. With CenterPoint Accounting’s flexible reporting tools, you can customize the reports you need so you can keep track of revenue and expenses. Asset and Liability Tracking can also help you keep up with changing valuations to inventory, to give you a better picture of your overall financial health.
In these trying days, it can be hard to know the best course of action for protecting your business. By knowing what help is available — and keeping your payroll and accounting records current — you can be better prepared for unforeseen challenges. This way, when things get back to normal, you’ll already be ahead of the game.