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Coronavirus’s (COVID-19) Impact

Mar 16, 2020

On March 13, 2020 President Trump declared a national state of emergency to speed up the response to impacts of COVID-19. This will invoke the Stafford Act and allow more federal aid to local and state municipalities. COVID-19 will have dynamic impacts on businesses that some have felt already. Others that will not be felt for some time.

In response, business owners needs to be proactive and review their risk-management plan. If one does not exist one should be put together immediately. It’s important to have a clear set of communication that is fact-based, to avoid spreading fear. Clear internal communication and a set of guidelines should be put into place immediately. As the impact of the spread of COVID-19 continues and grows, business tactics will need to adjust with it. A backup plan for resources, especially for human capital and the liquidity needs of the business, should be identified.

As the dynamics are changing, here are a few thoughts for a business owner to consider:

  • Revenue forecasts should be reviewed and revised if necessary.
  • Communicate with investors/owners about any earnings guidance changes.
  • Be proactive if there will be accounting/reporting delays.
  • Try to increase your financial backstop and monitor available cash/working capital.
  • Review corporate insurance coverage (e.g., business interruption insurance).
  • Consider using government-sponsored financial relief or bank loans to cover lost revenue and/or cash flow issues, if possible.

The federal government is currently in talks on different forms of financial relief packages. One of them floating around is a payroll tax cut and possible tax filing deadline extensions.

If you personally feel like you might be experiencing symptoms, please be sure to seek medical attention immediately. If you are an employee, be sure to communicate with your employer and employers be sure to communicate with your employees during this critical but ever changing situation. 

And a further note from the author: Please take the time to check in on family, friends and loved ones during this time of dynamic changes. A call or a text message can go a long way. Thank you to the medical professionals on the front line. Stay safe and be well.

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Timothy Schuster

Mr. Schuster is a Senior Manager providing tax compliance services to individual filers, as well as assistance on tax returns for companies in the manufacturing and real estate industries.

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