The COVID-19 pandemic changed how many industries thought about what they do, and accounting and finance are no exception. And while it’s hard to say precisely when the pandemic will be truly over, there are a few recommendations for your accounting and finance teams to mitigate risk as COVID (hopefully) wanes over time.
4 Risks Your Accounting & Finance Teams Are Likely Dealing With
Contractor Designations
Designating employees as contractors and freelancers has always been a tricky business. Do it improperly, and you could be facing severe consequences. If your company employs freelancers or contractors—roles that became even more popular during the pandemic—it’s a good idea to have your financial team revisit these designations to make sure everything is in order. It’s always better to be safe than sorry.
Repaying Loans
Whether you received a coronavirus-specific loan from the government or you borrowed funds elsewhere during the pandemic, it’s time to start focusing on paying those back. Unless you got an entirely forgivable loan and are using every penny of it for eligible expenses, you’ve likely racked up some debt during this difficult time. So it’s important to prioritize paying off those debts as soon as possible, and it’s something your accounting team should be keeping a close eye on.
Emergency Funds
Does your business have an emergency fund to rely on when times are tough? Perhaps you did, and it was depleted during COVID. Now is the perfect time for your accounting department to reevaluate your emergency funds or set up such a fund if it doesn’t exist already. If there’s one lesson we’ve learned from the pandemic, it’s that being well-prepared ahead of time is never a bad thing. And while we certainly hope another pandemic isn’t the next emergency you need to deal with, having the funds there no matter what you face will be well worth it.
Budget Tweaking
If your business is like most, you’ve experienced ups and downs over the past year or so. Think about what lessons you’ve learned during that time. What is truly necessary, and what isn’t? What’s more important to be spending money on that you weren’t before? Taking these things into account and adjusting your business budget—with the informed eye of your accounting department, of course—is a good idea moving forward.
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