The coronavirus pandemic has greatly affected worldwide economics. Small and big businesses are busy covering the financial losses as the employees are being laid off. The Canadian government has provided multiple grants and funds to small business owners to meet their operational needs. These grants and funds are provided by the officials in support of their business operations. Therefore, these financial resources should be properly utilized and accounted for in the books.
Small businesses require accounting assistance to maintain their business accounts so that they can be easily audited. Otherwise, there will be chances for mistakes. All businesses are required to follow accounting standards. Failure to meet those accounting implications may cause a financial crisis. Therefore, consulting an expert accountant is important. An expert accountant will help small businesses to manage their accounts, prepare flawless financial reports and handle any official audits. In the case of the pandemic, your professional accountant will assist you in the following considerations:
- Asset Impairments
- Recognize Revenue Streams
- Reimbursements & Penalties
Many businesses have witnessed a sharp decline in their overall sales. Some incurred huge operational costs to meet the healthcare guidelines. All of this has negatively affected the financial position of most businesses. The hospitality and tourism sectors were greatly impacted due to the virus. The logistics companies faced increased costs to deliver goods on time. Many resources were used and exhausted. While some faced a decline in market demand. All of it has some financial consequences which need to be reported on the financial statements. For which, businesses need to get professional accounting assistance to update their financial reports.
As the second wave of the virus continues, there are more chances of expected losses. These losses, whether they be on financial assets, non-financial assets, inventory or goodwill, need to be assessed for impairment issues. Asset impairment will help in deciding the fair market value of the assets depending on the current situation. This requires careful attention to detail and professional accounting services. Professional accountants will help you to determine the true value of your assets and support you in this financial crisis.
Recognize Revenue Streams:
A business may suffer from a cash inflow during the pandemic. This cash inflow may cause further financial disruptions. These may delay or cancel business operations. To make your business run smoothly despite financial issues, you need to consult an expert accountant. Your expert accountant will recognize your revenue streams, analyze your cash flows and will then prepare a feasible plan for your business.
Furthermore, in the case of a food company, the business might face order cancellations and refunds. It is very important to account for those refunds in the accounting books. For that reason, hiring a dedicated accountant is essential. It will help you recognize any losses, refunds or changes in your revenue streams. If it is not accounted for on time, it might cause accounting mistakes later on.
Reimbursement and Penalties:
Some businesses might be eligible for government grants or incentives. If your business meets the criteria, you need to record and account for those reimbursements properly. Similarly, if you face any penalties you have to record and present them in the financial reports accurately. A business usually faces a penalty when they cancel a contract. In such a pandemic, there are chances of contract cancellations. Therefore, all businesses should be fully equipped to record and recognize these accounting details. Otherwise, if you hire accounting services, you will not have to worry about it.
Businesses face financial challenges as a result of the natural pandemic. These challenges need to be encountered professionally by experienced accountants. An experienced accountant will have the skills and expertise to tackle such scenarios with confidence. As all finances need to be reported, maintaining accurate and timely financial reports will be the job of your accountant. He will be responsible for recording, analyzing and representing data to the CRA. In case of any delay or mistake, he will be held accountable. Therefore, consulting an accountant with a good grip over cloud accounting programs will make your workflow safe and easy.