Banner Shapes

FGMK’s COVID-19 Response Team is Here for You

Posted by : , , , , and on : March 28, 2020 | 8:00 pm

Nearly every business is scrambling, trying to address what seems like an insurmountable number of problems at once. Surviving the COVID-19 crisis is the immediate goal. Though some problems may seem impossible to resolve today, there are solutions - and opportunities - ahead. Tomorrow’s success depends on how effectively a business handles these critical challenges:

 

Workforce Capacity

  • Governmental relief is on the way. Workforce decisions made today can have profound impact on your access to relief, and businesses will need to choose between competing sources of relief; decisions made today are imperative to the success of tomorrow.
  • Businesses are facing, or have already faced, necessary workforce adjustments as a result of COVID-19 related shutdowns and/or waning demand. Navigating a myriad of possibilities and outcomes requires employers to carefully consider important differences between furloughs, workforce reductions or other arrangements.
  • Many businesses have transitioned, or are considering transitioning to a remote workforce. It is vital to address ancillary concerns raised as a result, such as cybersecurity, telecommuting policies, and long-term employee retention through clear guidance on expectations, value measurement, and compensation.

Financial Stress

  • COVID-19 is creating unprecedented financial stress, leading businesses to look at every opportunity to generate and conserve cash, even for businesses that have a history of strong liquidity and capital resources.
  • Nuances of government relief programs will need to be understood and weighed, as future operating decisions are made, and funding options are considered.
  • The enactment of the CARES Act provides businesses the ability to generate cash flow through tax credits, tax refunds, and even tax deferrals, but use of these tools must be weighed in light of other governmental relief, which could preclude access to these tools.
  • Detailed projections of capital needs and generation are essential to drive action. Projections must be constantly monitored and adjusted in this rapidly changing environment and must factor in the needs of not only the business, but also those of every constituent – including customers, suppliers, and partners.

Inventory and Supply Chain Shortfalls

  • Disruption in the supply chain is happening, with additional challenges likely to become more apparent in the coming months.
  • The expanded impact of COVID-19 globally will continue to create obstacles in supply chains that limit access to international channels, including, but certainly not limited to China.
  • Companies faced with strong demand or material shortages will need contingency plans to prioritize customers. Contingency planning is crucial, and frequent communication with lenders and stakeholders is critical.

Anticipating Changing Market Demands

  • Understanding how customer demand has shifted or decreased as a result of COVID-19 is essential now more than ever.
  • Demand changes require businesses to identify where there is adequate or scarce inventory downstream, and to adjust production schedules to this new reality, even if customers have not yet formally adjusted purchase quantities.
  • Businesses will need to quickly determine their necessary inventory requirements. As a result, many businesses will likely need to stop, delay, or lessen purchases already in process, in order to re-deploy cash to the most critical operating needs.
  • The use of technology may play a larger or different role than it has in the past, in order to improve your operations and interact with your customers.

Customer Outreach

  • Communicating with customers is paramount, and in many cases, it will have a direct impact on the survival of their businesses. Closer collaboration with customers helps give companies accurate and complete assessments of business situations and leads to better decisions.
  • Most are not able to digest the almost daily news about programs and resources being offered to help companies survive while operations are under pressure, while many businesses are operating with a pessimistic interpretation of government directives to curtail operations.
  • Those who can access relevant, accurate, and real-time information will have the advantage.

Risk Management

  • Protecting a business requires a clear understanding of the means available to manage or underwrite the risks that exist today, while being mindful of potential risk exposure in the future.
  • Businesses will have to identify new risks, prioritize,  and determine which mitigation strategies are feasible.
  • Cybersecurity risks that could adversely impact your technology environment and operations should not be overlooked as bad actors are looking to profit during this time of disruption.
  • Proactive consultation with insurance carriers and advisors will help identify and assess key risk areas and evaluate protection options available.

New Opportunities

  • The current environment will present opportunities for some companies to position themselves now for even longer-term success.
  • For some, this may be an excellent time to lock-in more favorable pricing and terms with key suppliers; to acquire struggling but inherently strong companies; to make a risk assessment of business systems and IT infrastructure and upgrade as needed; to acquire key capital equipment on favorable terms.
  • Demand for many types of medical equipment and supplies is surging, and companies in these supply chains must prepare increased capacity or repurpose existing capacity to supply these items. In some cases, switching production to these or similarly in-demand products will be an attractive expansion opportunity.
  • Seizing these types of opportunities can be critical in times of crisis.

 

FGMK’s COVID-19 Response Team of experienced professionals possesses deep expertise in these areas, and is ready to provide answers, guidance, scenario planning and the recommendations that you need to navigate through these challenging times.

Robert H. Minshall

Partner

312.818.4302

RMinshall@fgmk.com

Christopher A. Shoup

Managing Director

847.886.5913

CShoup@fgmk.com

Michael A. Fenske

Managing Director

312.638.2941

MFenske@fgmk.com

Michael H. Becker

Director

847.964.5342

MBecker@fgmk.com

John C. Barry

Director

312.818.4346

JBarry@fgmk.com

 

The summary information in this document is being provided for education purposes only. Recipients may not rely  on this summary other than for the purpose intended, and the contents should not be construed as accounting, tax, investment, or legal advice. We encourage any recipients to contact the authors for any inquiries regarding the contents. FGMK (and its related entities and partners) shall not be responsible for any loss incurred by any person that relies on this publication.

 

About FGMK

 

FGMK is a leading professional services firm providing assurance, tax and advisory services to privately held businesses, global public companies, entrepreneurs, high-net-worth individuals and not-for-profit organizations. FGMK is among the largest accounting firms in Chicago and one of the top ranked accounting firms in the United States. For over 50 years, FGMK has recommended strategies that give our clients a competitive edge. Our value proposition is to offer clients a hands-on operating model, with our most senior professionals actively involved in client service delivery.