Business Accounting Reorganise amid COVID 19

The global pandemic COVID 19 has already had a significant impact on a global trade and economy. There is a great deal of uncertainty as to how COVID -19 situations will continue to evolve and the scenario are rapidly changing. The uncertainty arises primarily from interruptions in production, high cost of raw materials, supply chain disruptions, unavailability of personnel, closure of facilities, decline in demands, liquidity, business continuity issues, etc…

Below are a few major areas to do a complete 360-degree analysis in any business when it comes to finance.

• Evaluate Receivables by extensive efforts/follow-up mechanism to collect receivables before they become overdue.

 

 

 

 

 

 

• Revisit Financial and Cash flow Projections with different crises scenarios, make sensitivity analysis to take decision quickly.

 

 

 

 

 

 

• Regularly Update & Review Product Costing as situations change rapidly and right costing analysis help to make quick decision on time.

• Revisit Order Book for Sales and Selling Prices with reference to creditworthiness and credit terms of customers. Overall demand and supply cycle depends on economy market. Right call on pricing giving due consideration of stock holding costs and fixed overheads.
• Protect Forex Obligations by contacting banks and see forward covers for import/export transactions.
• Review Insurance Policies by checking all the possible scenarios to cover loss of profits due to business disruptions in COVID – 19.

 

 

 

 

 

 

• Internal Controls by implementing new controls or modify existing internal controls effectively to achieve business objectives and goals as per available resources.

 

Written by

Mitesh Parmar, CFO