Finance professionals express concerns over impact of COVID-19 on businesses

Organisations large and small, in the public and private sectors, have expressed deep concerns about the impact of COVID-19 on their people, productivity and cashflow, the latest global research by the Association of Chartered Certified Accountant (ACCA) revealed.

The ACCA’s new research, which was among 10,000 finance professionals, including an expert panel of 227 in Nigeria, showed that the most severe impact is from employee productivity being negatively affected.

In fact, 55 per cent of respondents believed that most severe impact is from employee productivity, followed by cash flow problems hitting business viability, with 33 per cent stating this as an impact.

Just under a third of respondents also explained they are unable to obtain supplies from preferred suppliers in regions affected by the outbreak.

ACCA in the report stated that only 45 per cent of businesses have been able to conduct a financial forecast, 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.

It state that as a result, 82 per cent suggest their organisations are expecting it’s likely they will see negative revenue growth, with 77per cent saying they’re expecting negative profit growth too.

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

“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.”

However, ACCA recommended 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: ‘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 – stifled and stalled customer demand, supply chain disruption, people mobility issues, product and service delays or deferments, investment challenges and so on.

Commenting on the findings, Tom Isibor, head of ACCA Nigeria, said: ‘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.’

“What’s heartening to see is 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’, Isibor explained.