In my previous article in business mirror, I emphasized the importance of accountants and the crucial steps they can take in helping Micro, small and medium enterprises (MSMEs) survive and thrive during the pandemic.
This second part, allow me to share additional ways on how accountants can effectively help MSMEs during these trying times:
- Analyze revenue – A simple yet effective way to analyze revenue is by breaking it down between recurring and one-time revenues.
a. Recurring – During these times, it is crucial to have a predictable and recurring income source. Recurring revenues will give a steady flow of cash while regaining the Company’s momentum from previously suffered losses. So, ensure that you can maintain and protect these type of revenues.
b. One-time – Even though the revenues may not be repeated, one-time revenues provide valuable information that we can use to acquire new customers. How can you do that? – Dig deep how you were able to win the one-time customer by checking the customer profile (e.g., customer location, age group, gender) and the amount you spent to acquire the customer. Use these data to find similar potential customers and allocate a marketing budget. Don’t forget to consider the customer’s lifetime value when deciding how much you will spend on customer acquisition. Of course, you can use this strategy to acquire, not just one-time, but also recurring customers.
2. Take note of regulatory deadlines – The last thing we want to happen during times where cash is critical for survival is to pay penalties due to late regulatory compliance. So, ensure that you can file in an accurate and timely manner. Take note to file as well the required tax schedules such as VAT RELIEF, quarterly alpha list of payees, alpha list of withholding tax agents to avoid penalties. On a related topic, here is an article I’ve written about the 5 costly mistakes during tax compliance and how to avoid them.
3. Take care of your physical and mental health – The lockdown has caused us to work remotely – away from our normal working environment where we can get along physically with our colleagues. According to studies, isolation has been one of the causes of one’s loneliness and stress. So, take good care of your mental and physical health because by taking care of yourself, you also take care of the business. Here is our compact guide on the 5 ways you can cope with the quarantine.
I can’t emphasize enough how important accountants are during these times. They have the skills and information that are essential for business survival and growth.
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