COVID-19: Finance professionals worry over impact of the pandemic on businesses

Finance professionals working in organizations, large and small in the public and private sectors, have expressed deep concerns about the impact of Covid-19 on people, productivity and cashflow of businesses.

The dreaded disease which the World Health Organisation has described as a global health emergency, is taking toll on families and their businesses, leading to pay cuts and posing threat to job security.

A  new global research conducted by Association Of Chartered Certified Accountants (ACCA) among 10,000 finance professionals, including an expert panel of 227 in Nigeria turned out startling revelations.

Respondents in Nigeria say the most severe impact of the virus is employee productivity being negatively affected, with 55 percent saying this was the case, followed by cash flow problems hitting business viability.

33 percent of the respondents, according to the research, stated that the virus is really an impact while  a third of the respondents explained they were unable to obtain supplies from preferred suppliers in regions affected by the outbreak.

The research says that only 45 percent  of businesses have been able to conduct a financial reforecast, perhaps, due to the fast-evolving scale and duration of the Covid-19 pandemic alongside the extent of necessary social distancing controls put in place by governments, which have created vast uncertainties for businesses.

As a result, 82 percent suggest their organisations are expecting that they may will see negative revenue growth, with 77 percent saying they’re expecting negative profit growth too.

The findings also showed 63 percent of respondents thought their organisation’s business continuity plan has allowed them to respond effectively to Covid-19 disruptions. Yet, only 10 percent of respondents thought the economic stimulus package introduced by the government in response to Covid-19 was effective for supporting their organisation.

Tom Isibor, head of ACCA Nigeria, explained in a statement obtained by BusinessDay on Thursday that this research aims to understand the business and financial blows to organisations so far from the viewpoint of ACCA’s members – finance professionals working in a wide range of businesses and organisations.

“The findings gauge the short to medium term implications, while also looking at the measures being undertaken and considered by organisations to mitigate the damage. It also looks at what lessons we can all learn from the pandemic,” Isibor said.

ACCA is recommending that organisations follow the ‘three As’ of crisis planning – Act to respond in a sustainable manner and focus on employees and stakeholders; Analyse the different information sources to secure your organisation; and Anticipate the business impact and future trends.

Jamie Lyon, the report author, explains that “everyone is hurting, but particularly the smaller organisations. For many of us, the ‘face of work’ has changed overnight. In the short term, leaders are facing a very difficult operating environment when it comes to employee productivity and engagement, alongside a number of compounding and wide-ranging challenges.

He added that the pandemic has stifled and stalled customer demand, supply chain disruption, people mobility issues, product and service delays or deferments, investment challenges and so on.

According to Isibor, “the Covid-19 situation continues to evolve rapidly, and finance professionals are increasingly vital to organisations to manage the finances, and offer strategic support and the professional guidance needed to get through this time.  There will be great economic challenges ahead and anticipating the future needs is key to help businesses stay afloat.”

He said that it’s heartening to see  many organisations’ commitment to ensuring the health and wellbeing of employees, customers and other stakeholders first and foremost.

“But overall the data confirms Covid-19 is a huge challenge across all sectors and sizes of business, and regions and countries. The main issue is uncertainty, which affects the ability of organisations to plan properly, to react and to forecast appropriately,” he said.

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