By Alan R. Sasserath, CPA, MS
As you are aware, since my last writing this past Tuesday, the health and economic issues regarding Covid-19 have changed for the worse and will most likely continue to change for the worse in the short term.
I have to admit, when I saw that accountants were on the list of essential businesses in NYS, I wasn’t exactly sure why. After reviewing the legislation that has already come, drafts of the stimulus packages that are to come and seeing what our clients faced this past week and what we believe they will be facing in the coming weeks, I completely understand why we are on the list. We are here to help.
So we are clear, we view our response to assist you through this dark phase in our country’s history as part of our civic duty. Our firm is going through many of the same things that you are going through. While we cannot work for free, we understand everyone’s predicament as it relates to this type of work and will be reasonable with all of our clients with regards to our fees and ask them to be reasonable with us. We are not viewing this as a windfall opportunity for us, but rather we are asking that we end up in no worse shape than any of you when this is all said and done. We will be making the same tough decisions internally that we believe many of you will be making in the coming days/weeks.
We are writing now to help you understand the resources available to small/mid-sized businesses – We are here for you and want to help you through this. There are resources available to businesses. We are waiting to hear about what we hope will be the largest piece of legislation – the Coronavirus Stimulus Package (Expected to be in the range of $1.4 – $1.8 trillion.) being negotiated by congress/senate/president and hope to see that passed as early as tomorrow. As soon as that comes out, we will digest it and explain how it will apply to many of you. Before we get that legislation, here is what we know:
- Tax Filings: The April 15th tax filing deadline was extended until July 15th. This includes 2019 personal income tax, corporate income tax, trust and estate income tax as well as first quarter 2020 estimated tax payments.
- Families First Coronavirus Response Act: This is a piece of legislation that gives employers/employees relief if the employee or their families have been diagnosed with the Coronavirus.
- SBA Disaster Loans: These are not the typical SBA loan that you apply for from your bank. These are loans that need to be applied for direct with the SBA. The website to apply for such a loan is located here. We will have a list available tomorrow of the items/information required to complete the application.
What else should you be thinking about? Please see my post earlier this week here, especially the highlighted areas, with an update immediately below on certain items:
- Make a cashflow budget. What cash do you have? What cash do you expect to come in over the next week, 4 weeks and 8 weeks? What cash do you need to pay out over the next week, 4 weeks, 8 weeks? That is the budget, plain and simple. We can help you with this. Please don’t hesitate to lean on us. Update that every week for the subsequent week, 4 weeks, 8 weeks. Just like the healthcare community is now being very aggressive in fighting the Coronavirus, you need to be very aggressive in managing your cashflow. You need to take these steps immediately. Many of those that waited to address this when previous disasters struck were the ones that didn’t make it to the other side.
- Based on the budget, control your cash. Take vendor payments off autopay. Review your credit line availability. Defer expenses where possible. Stay close to your bank, customers and vendors. Review vendor contracts.
- If your business has significantly dropped off and you own a pass through entity consider stopping withholding on your salary, possibly stopping your salary altogether.
- Insurance: Review your policies to see if there is any coverage for this type of event.
- Supply Chain: Many supply chains have shut down. Monitor the chain and find out when vendors expect it to open up, whether they have or will have product once it does open up. You need to understand the timing that you expect to be back in business.
If things get worse from the health and economic perspective, as we expect it to, keep in mind that scams will most likely increase. Trust your gut – If something doesn’t seem right, it probably isn’t right. Protect your personal and business information.
As I said below, keep communications open with: customers, staff, your team, vendors, bank, attorney, …
We are all in this together. We are here for you. We will get through this together.
We will continue to communicate via direct email from me and our constant contact database.
Thank you for your time.