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Guidance for Businesses Navigating the Financial Crisis

As you may be aware, the Senate and House have both passed an extension to the deadline for businesses to apply for the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) loan program. The measure will now go to the President for his signature. Still, much uncertainty remains, including the promise of another federal aid package, and the question the entire human race wants answered: when will the pandemic end?

Until more is clear, AAFCPAs advises clients to consider the following best practice recommendations to best navigate this uncharted situation:

  • Revisit your budgeting and cash flow forecasting models. Project for best-case and worst-case scenarios and develop contingency plans if things do not go as expected.
  • Assess your funding sources and forecast the impact this crisis will have on them in the long term. For example, if you are nonprofit who is reliant on donations, will your donors be able to give at the same level? If you are federal and/or state funded, do you anticipate cuts in funding? If you are fee for service revenue, do you anticipate a reduction in volume?
  • Evaluate the impact market decline has on your future cash flow and operations.
  • Assemble a team to assess inefficiencies in your operations. Can you streamline operations to control and contain costs?  AAFCPAs strongly urges clients to consider process improvement measures that can increase operational efficiencies and replace manual processes with electronic systems.
  • Perform a financial analysis to determine the true margins on each program, product, or service. This will help you decide where to continue to allocate resources.
  • Assess if the pandemic will impact how you run your business in the future. Can more services and activities be delivered in a remote manner? Will there be costs or costs savings for doing this? For example, does it make sense to stick with a remote or hybrid-remote workforce. This may enable you to save on facility costs.
  • Identify opportunities to partner with other organizations to develop economies of scale. You may be able to share resources and control costs.

For months now, AAFCPAs has provided guidance to clients on whether or how to use benefits under the federal CARES Act, or whether furloughing or laying off workers is the right decision. This has included the development of pro-forma financial reports to demonstrate what clients’ cash flows may look like in different best-case and worst-case scenarios and based on certain assumptions. Clients are able to see the impact of different decisions and the extent to which they may mitigate those risks.

AAFCPAs is dedicated to helping you solve business, regulatory, and technological challenges to keep your company operating optimally in the short-term and long-term.

If you have any questions, please contact: Matthew Hutt, CPA, CGMA at 774.512.4043, mhutt@nullaafcpa.com; Janice O’Reilly, CPA, CGMA, 774.512.9046, joreilly@nullaafcpa.com; or your AAFCPAs Partner.

About the Authors

Janice O'Reilly CPA
Janice is a Partner in the Consulting Division of AAFCPAs and leader of the Managed Accounting Solutions (MAS) practice, which provides “right-size” outsourced accounting solutions, from cloud-based bookkeeping to CFO deliverables, designed to optimize the effectiveness of the modern finance function.  Public, privately-held, and nonprofit organizations value the pragmatic assessment, infrastructure set-up, and flawless execution of their accounting & finance deliverables—all completed with the resources and technical expertise of AAFCPAs’ full-service CPA and consulting firm. Janice is a charismatic leader and collaborative senior finance and business executive with an entrepreneurial approach to problem solving, and extensive global operating experience.
Matthew Hutt CPA
Matt leads AAFCPAs’ Healthcare Division, providing assurance, tax and advisory solutions for Federally Qualified Health Centers (FQHCs), behavioral health providers, home care agencies and hospices, nursing homes, and senior care living centers. Matt advises healthcare providers on consolidation and coordination of care, including the integration of behavioral health into the primary care delivery system. He also provides consulting solutions for providers transitioning to new value-based reimbursement models, and data driven patient care, including: developing business process and controls for collecting and advantaging data to provide analysis on: provider activity, delivery of care, and analysis of efficiency & cost effectiveness. Matt is also highly-sought after for his knowledge on issues related to affordable housing developers with requirements related to the US Department of Housing and Urban Development, MassHousing, Low Income Housing Tax Credits, Historical Tax Credits and New Markets Tax Credits.