This article was first published by Praxity on 9 April 2020
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 that 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.
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 in March, 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 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 and territory packages, and New Zealand’s economic response package and wage subsidies.
The Australian Government package, for example, includes the JobKeeper Payment incentive. As the most significant tax measure announced in the last 20 years, the JobKeeper Payment 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 as 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.
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.
Visit Praxity’s e-booklet for more information on Covid-19 – support by location – http://resources.praxity.com/covid-19-support-by-location/cover/