While mask mandates are being lifted in some states, they’re still firmly in place in others; although the country seems to be recovering, COVID-19’s future path is still unknown. With so much uncertainty about the long-term effects of the pandemic, many business owners are unsure about reopening after COVID-19. Can you afford to reopen your doors and weather similar financial storms?
For large companies that have stayed open, the pandemic’s price tag has been formidable. For example, in mid-2020 Target announced that it planned to spend at least another $1 billion that year on worker-related expenses caused by the pandemic, including safety equipment, wages and paid leave. During the same period, Amazon announced it would spend $4 billion or more on employee protective equipment, enhanced cleaning materials and higher wages for hourly team members.
Given the unpredictable situation many businesses have been in, it may seem next to impossible for you as a business owner to accurately assess just what your post-pandemic costs might be. Enlist the help of a CPA to help you with your business accounting and wealth building as you prepare for reopening after COVID.
Affording the Pandemic
Regardless of what happens during the rest of the year, a successful reopening will depend not only on implementing safety protocols but also on budgeting to afford these protocols, as well as any further pandemic-related events that may occur.
With the many expenses—and income loss—incurred by the pandemic, the survival of your business will depend upon careful business accounting. Your best strategy is to hire a licensed CPA who can help you negotiate through the financial concerns you currently have.
For Texas-based businesses wondering how accounting in Austin can help craft a strategy for reopening after COVID-19, consider these four important questions and how you might address them:
1. With loss of revenue from the past year, can you afford to reopen?
If you are struggling to stay afloat, consider applying for any of the grants made available to small businesses affected by the pandemic.
A number of state and federal programs have been created to provide funding for business owners planning to reopen. For example, the Small Business Administration implemented a federally funded Restaurant Revitalization Fund to help restaurants and bars recoup their pandemic losses (California has invested $28.6 billion in a similar program for local restaurants). Likewise, Texas has posted a list of COVID-19 funding grants currently available for small businesses.
2. If there’s another spike of COVID cases, can your company afford to invest in PPE, plexiglass barricades, and other necessary safety materials?
According to the White House’s Guidelines for Opening Up America Again, President Biden plans to create a federally funded “restart program” that will help offset the costs of PPE—including masks, gloves, cleaning materials and social distancing installations—for America’s small businesses.
Budgeting for the necessary PPE could be the difference between staying open or closing down. Although the worst of the pandemic is likely over, you should be prepared for similar world events.
3. Can you afford to run your company at a lower capacity if you have to reopen in phases?
If the answer is no, you have some planning to do. Analyze the comprehensive costs vs potential profits of a phased reopening. Could you make enough to justify employee wages, mortgage payments, etc.? Figure out what costs you can cut and where you can bring in more money to offset the financial implications of operating at a lower capacity.
4. Can your company continue operating if another COVID-19 wave causes widespread absenteeism?
Before the pandemic, absenteeism cost companies more than $150 billion per year. Add to this the dangers of COVID, and your sick employees who are mandated to quarantine could cost you more than you realize. It’s essential for your company to have a clearly articulated, compassionate sick-leave policy firmly in place before reopening. Revamp policies related to overtime and replacement worker costs, and have backup plans in case your business finds itself shorthanded.
Accounting Solutions for Pandemic Problems
A pandemic is impossible to budget for, but a certified, licensed accountant can help you manage cash flow and allocate funds for COVID-19 considerations. A licensed accountant could be one of your best weapons in your company’s reopening after COVID-19!
As you prepare to return to pre-pandemic operations, contact Insogna CPA for help creating customized accounting solutions. Build a financial strategy for your business that will help you survive whatever comes your way!