I have always relished the creativity, thrill, suspense, and drama that Hollywood movies offer. I very well remember when I first saw the movie ‘Contagion’, back in my school days. The movie was around a deadly virus that soon becomes a worldwide pandemic. But looking back and considering the current situation, I wonder how precise the movie was, a real story highlighting the future of the world. All that has been going on with the COVID situation has put the Accounting professionals along with the medical professionals at the frontline. Outsourced accounting combined with other strategies has become crucial which we will be discussing later in this blog.
Until December 2019, our lives were pretty normal. Many had their own goals and objectives set for 2020 and how they would be working hard towards achieving these goals. But little did we know that a ‘Contagion’ inspired reality is awaiting us in the form of COVID-19 that would put human lives in danger and leave the global economy shattered.
The past 10 months or so haven’t been going the way people planned them. While human life is obviously above all, the economic downturn, however, has left businesses struggling as the effects continue to grow in nature. Lockdown and social distancing have pushed businesses at the backfoot. The work from home culture seems to be the ‘new normal’ across all industries, trying to revive businesses from the pitfall.
While people and businesses continue to settle in, in accordance with the ‘new normal’, Accounting & Financial reporting have become more and more crucial, helping businesses deal with the unprecedented economic situation caused due to the pandemic. Both individuals and businesses are in dire need of effective accounting & reporting of their financials to stay afloat. The resurgence of COVID-19 among European nations is also raising alarm as another lockdown seems to be very likely.
Without further ado, let’s hop on to discussing how Accounting and Financial Reporting amid the ‘new normal’ can help businesses recover from the losses and prepare for the future.
Leveraging technology to streamline ‘work from home’ processes
Accounting and Financial reporting have been constantly evolving, fueled by the digital transformation that has been going on for the past two decades or so. Amid the COVID-19 outbreak, however, the transformation has become much more important since it has come down to the survival of the fittest.
Moreover, the remote work culture has further triggered Accounting firms( in-house teams for many businesses) to incorporate technology into their existing business model, online bookkeeping services are a fine example of that. This can be witnessed in the form of Accounting software, digital communication channels, training and development of Accounting professionals, and so on. During these tough times, businesses have become highly reliant on their Accounting providers and while working remotely seems to be the only logical solution, leveraging technology into their accounting and reporting processes has become an integral part of every business revival strategy.’
An effective Outsourcing strategy seems legit
An Outsourcing model has always been closely associated with cost-saving, however, it is much more than that. The ongoing pandemic has made businesses realise that outsourcing can be a way for them to not only save costs but leverage third-party resources to streamline business processes and focus more on services in which they excel, especially outsourcing their accounting needs.
Outsourced Accounting services have come up as a saviour for businesses that didn’t had/ have any dedicated Accounting team working for them (specially for small businesses) since Accounting needs have transformed from simple bookkeeping to analysis, advisory, forensic and more, during the ongoing crisis.
From just Accounting to Advisory
‘Plan B, C, D, etc’ are what businesses need after the unanticipated arrival of the coronavirus. Everyone was playing a safe bet until the pandemic turned the table and left businesses in a state of unpredictability and uncertainty. COVID-19 has been majorly stressing the financial structure which is why the dependency on Accounting professionals has been rising.
Desperate times ask for desperate measures. Many businesses have already switched over to Accountants (and accounting professionals) as their trusted business advisor, seeking their advice, mapping out potential financial risks, redefining contractual terms with clients, tax matters, etc as the demand for financial analysis and reporting have increased.
However, businesses need to realize the fact that Accountancy is quite similar to the medical profession when it comes to financial health and well-being. Therefore, business owners need to be transparent with their Accountancy providers, if they need assurance of both qualitative and quantitative assessment.
Future Planning with a Business Continuity Plan
As disruptions in the economic landscape continue to grow, businesses continue to face financial challenges. Dealing with the crisis in the present has become a priority for now. While dealing with the present situation is very important, there are clear signs that the financial effects of the COVID-19 will be long-term and businesses need to plan accordingly.
The ‘new normal’ is here to stay and businesses should already start gearing up for the new post-COVID world. Therefore, business owners not only need to focus on the current situation but they also need to seek out professional advice. Studying the current financial situation, forecasting the future based on statistical analysis, and coming up with future contingency plans have become mainstream accounting needs that will continue to grow even further.
Forensic Accounting for compliant Financial Reporting
As the economy continues to suffer due to the pandemic, many businesses have been found practicing nefarious activities, trying hard to avoid insolvencies or secure more funds from the various government schemes or other reasons. All in all, the whole COVID situation has put businesses in a tough spot where the line between right and wrong seems to be blurred. This brings us to the point where Forensic Accounting has become a crucial practice, even for small businesses. Even though Forensic Accounting has always been an integral part of effective business strategies, the current situation has increased the need and demand for Forensic Accounting.
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Implementing Forensic Accounting into their existing business model can help business owners and stockholders avoid the risks of being caught in illegal financial activities or even come out of them at times, if found guilty.
The global financial market is undergoing one of the biggest economic downturns in the recent past. Many businesses are finding it hard to adapt to the ‘new normal’ that has been forced upon them, following the arrival of the corona outbreak.
Amid all the chaos, effective Accounting and Financial reporting is and will continue to be one of the deciding factors in how well a business comes out once the global economy starts getting better.