{"id":20687,"date":"2020-08-06T08:00:00","date_gmt":"2020-08-06T13:00:00","guid":{"rendered":"https:\/\/taxprocenter.proconnect.intuit.com\/?p=20687"},"modified":"2021-04-06T08:48:31","modified_gmt":"2021-04-06T13:48:31","slug":"accounting-for-the-next-stage-of-covid-19","status":"publish","type":"post","link":"https:\/\/accountants.intuit.com\/taxprocenter\/practice-management\/accounting-for-the-next-stage-of-covid-19\/","title":{"rendered":"Accounting for the next stage of COVID-19"},"content":{"rendered":"

You don\u2019t need yet another article that talks about how things have changed over the last few months in these uncertain times, or how businesses everywhere are adapting to the new normal.<\/p>\n

The coronavirus crisis<\/a> has tested everyone, but now that you have\u00a0adapted to the initial disruption, you need to shift your gaze away from just getting through each day to thinking longer term.<\/p>\n

Back to building your firm, developing your staff, honoring your values, and continuing to provide clients with the vital assistance they need.<\/p>\n

In reality, no one knows what is going to happen next. You don’t know what the economy is going to be like. You don\u2019t know what restrictions and contingencies will be in place, and for how long. And you don\u2019t know how your clients will fare.<\/p>\n

Which is why it is understandable if you are unsure how to get ready for the next phase without a reliable projection of what is going to happen.<\/p>\n

Strategic planning, even in uncertain times<\/b><\/p>\n

While things are uncertain, you can still put a strategic plan in place. The right place to start is to evaluate\u00a0your plan for 2020<\/a>. By analyzing what has changed, you\u2019ll have a good sense of the adjustments needed in your plan going forward.<\/p>\n

As a leader in your firm, you\u2019ll be simultaneously handling the direct issues stemming from COVID-19 and planning for the future.<\/p>\n

If you developed a plan for 2020, you don\u2019t need to abandon it. A goal of a plan in the first place is to set targets, but you always maintain the ability to adjust it.<\/p>\n

Revising your plan involves two elements. First, you need to ensure survival under the worst-case scenario circumstances. Second, you need to plan for growth while maintaining consistency with your values.<\/p>\n

Planning for survival.<\/strong> In order to build a strategic plan, you\u2019ll need to run multiple scenarios. Entrepreneur and investor Mark Cuban recently said that he advises businesses to \u201cplan for the worst and hope for the best.\u201d<\/p>\n

Your strategic plan will include your financial picture, as well as your team infrastructure and client-growth strategy. As you plan for survival, it\u2019s useful to take a pessimistic approach. Think through what-if scenarios such as losing clients or stalled growth.<\/p>\n

This is hopefully not what is going to happen, but gives you the ability to make decisions if the economic recovery is slow.<\/p>\n

Planning for what\u2019s next.\u00a0<\/strong>As you plan for survival, you also want to create a plan that includes preparing for the future. While a lot has changed in the world, there is also much that is still the same.<\/p>\n

Why did you start the firm? Where do you want to be in 10 years?<\/p>\n

Use these clarifying questions to help you think about short-term decisions. Most likely, your\u00a0big-picture goals<\/a>\u00a0are still attainable, even if you\u2019ve had a setback.<\/p>\n

The mistake you don\u2019t want to make is to lose discipline in marketing or operations. If you stop communicating with potential clients or make deals with unprofitable clients, you will not be set up well for growth when times are more favorable.<\/p>\n

Use reliable data to gauge your current situation<\/b><\/p>\n

Since the coronavirus crisis began,\u00a0 it has dominated the news. The challenge whenever there is a torrent of information coming from different sources is knowing what information is accurate.<\/p>\n

But, in any situation, you can trust your own data.<\/p>\n

Again, you can\u2019t predict what\u2019s going to happen, but it is totally practical to know the current state of your business. Having this knowledge ready and updated is the key to making good decisions.<\/p>\n

You should have an operational and financial dashboard. This can come in different formats, from the complex and high-tech, to something you develop and track yourself. Whatever you do, keep the following in mind:<\/p>\n