How are CPA Practices Impacted by the COVID-19 Outbreak
The coronavirus pandemic is an unprecedented crisis that will impact every business and industry in one way or another. For many businesses, the effect has been immediate and potentially devastating.
For example, restaurants, bars, malls and other businesses where large groups of people regularly gather are facing the prospect of being closed down for several weeks or longer. Government relief will be available to businesses that have been greatly impacted by the COVID-19 outbreak, but it is unclear if that will be enough to save them. We all hope it will be.
There are other industries, however, that have an opportunity to thrive during this crisis by serving those businesses that have been severely impacted by it. One of those is accounting practices. Some adjustments might be needed, but with the right approach, CPA firms can be one of the unsung heroes that help businesses get through this difficult time.
A lot of this has to do with accountants helping clients understand the actions the government is taking to provide relief and how they can gain access to the resources they need to survive. There have been a series of executive orders, and Congress has passed legislation that is geared toward helping individuals and businesses. Here are some of the highlights:
- The filing deadline for the 2019 tax year has been extended from April 15 to July 15 with no late fees or penalties for filers who have to pay into the government.
- Most taxpayers will receive a $1200 individual payment or a $2400 payment for couples along with $500 for each child.
- Businesses will have easier access to small business administration (SBA) loans, including up to $2 million for certain businesses and nonprofits that are in declared coronavirus disaster areas.
- One of the pieces of legislation contains payroll tax credit provisions for employers.
- Businesses will have the ability to delay a portion of the payroll tax until the next tax year.
- Small businesses who maintain their workforce could gain access to a newly created federal payroll funding account in order to pay their employees.
This situation is obviously very fluid, and there are sure to be additional initiatives by federal, state, and local governments as officials gain a better understanding of what is needed to keep businesses afloat. As always, it is imperative for CPAs to keep up on all the latest changes, so they can provide their clients access to everything that is available to them.
Important Considerations for Firms that are Going Virtual: In many areas of the country, non-essential businesses are required to either work from home or not work at all. For accounting firms, this could mean having employees work remotely at least for the time being. Although once you have started doing this, you may find that this is a change you want to implement permanently.
Here are some of the important issues you will need to address if you are making the transition to a virtual office:
- Incoming Calls: Make sure your phone system is properly equipped to route calls to the proper recipients when everyone is working at home. This could require upgrading your current system.
- Internet Connections and Communication: When people are working from home, they may be on a Wi-Fi network that is shared with others in the household. This could raise security concerns and adversely affect various ways of communicating such as videoconferencing. Encourage your staff to connect their computers directly to the internet using an ethernet cable. Also be sure they have an adequate download/upload speed for the work they need to accomplish.
- Securing Client Information: You will need to come up with a document management system that ensures that sensitive data stays secure. For example, if you are using a cloud-based document storage system, make sure it is one that has bank-grade encryption.
- Work from Home Adjustments: Sometimes, employees have a hard time making the switch from working in an office to working out of their homes. For example, if they do not have a clearly separate area from which to work, it is easy for the lines between personal and business space to get blurred. Be sure that everyone in the firm takes the proper steps needed to make a smooth adjustment.
We are Here for You: This is a challenging time for all business owners, and especially those who want to sell their businesses in the near future. If you are the owner of an accounting practice and you have been looking to sell, understand that things might be slow for a little while, but we will get through this.
At Berkshire, we specialize in the buying and selling of accounting practices. We have many years of experience helping clients that are going through this type of change in their lives, and even as we wait for everything to get back to normal, we can still help you take some of the initial steps needed to move forward with this goal. Feel free to reach out to us anytime to find out how we can help.