Accounting and Reporting in a Post Coronavirus World

Principles of accounting haven't changed due to Coronavirus (CV), this isn't the first Pandemic. Not our first time around the proverbial “block”, so to speak.

ACCOUNTING

However, there are a few things to be very careful about if you’re in charge of the Accounting and Reporting at your company. In terms of Accounting, it is vital that you keep in mind the very devastating effects CV might have had on your business, so make sure you’ve reviewed and updated your formulas, your worksheets, and schedules.

You will be required to make necessary adjustments to your books due to CV. Another great example would be, adjust your Accruals based on activity not history, were there any Fixed Asset transfers due to CV?

Certainly, there are adjustments to be made to your payroll file (Furloughs, Layoffs, Salary Reduction).

Maybe your business has pivoted completely? Keep a very close eye on these adjustments and make sure you’ve revised financials accordingly.

REPORTING

Now as for reporting, how do I put this politely….? Your Prior Year Comparables? THROW ’EM OUT THE WINDOW! Your 2020 Budget can go along with your YoY Comps too. No need for these two, absolutely not.

Your reporting must all be done on a Day over Day basis, Week over Week, and/or Trailing 7 Days.

Your business is looking to beat its record of yesterday, not of last year anymore. Focus on making progress on a DoD basis, tweak operations on an ongoing basis.

OPPORTUNITIES

Maybe not all is bad, maybe there are opportunities created in this madness. There certainly are! For one, the metrics you used Pre-CV don't apply anymore. This means you can create new metrics and compare your performance on that.

Most “small” startups and businesses are eligible for State’s Financial support. Payroll Protection Program may be vital for your business. Be sure to look into it and other programs by the SBA.

Accounting principals may not have changed, but the idea of adding EBITDAC — Earnings Before Intrest, Tax, Depreciation and Amortization and Coronavirus may not be such a bad died right about now.