The Covid Effect
It is just one big messed up ball of interweaving threads, one leading to the next and then to another, until it has affected every square inch of your life. Here’s an example, guessing most of you haven’t thought of. So think about this, companies, with thousands of employees who are no longer working in thousands of square foot buildings, in multiple locations. So, therefore, the restrooms are not in high demand. Not to get too far into the ‘sewer’ but the reality is, the CE has worked its way here also. The taxes on the water usage is not being incurred, thus the municipalities are not meeting their budgets. In addition, the drain systems need ‘flushed’ to keep the, ‘smells’ from coming back up. Solution, the corporation hired a company to go in and ‘flush’ the system, yep, one lever at a time, regularly. Everything is being affected everywhere. The effect is large to small, but it is everywhere. Of all the effects, our financial health, is on the forefront of our minds. To withhold or not to withhold, to defer or not to defer, to apply or not to apply. Those are the questions that I hear from small business owners. Everyone is trying to determine the best option for the financial security of their company. As with most things in life, there isn’t a one size fits all when it comes to making that determination. While this may not be an exact fit, this guideline should give you a direction of thought.
Have you adjusted your goals for 2020? Now that we have about 6 months experience with the ‘Covid Effect’ on our businesses, it is time to clamp down and make a plan. Don’t remodel your office, if that wasn’t in your plan before the Covid Effect.
What loans, grants, deferments are available to you and your employees? Consider utilizing those options. Making a plan means preparing for the best and worst case scenarios. It also doesn’t mean to just spend haphazardly. Ultimately, the burden falls on you as the owner to validate the records. This article by a SHRM expert has recent information pertaining to payroll tax deferments that started September 1. Contact your bookkeeper or HR expert if you need assistance to determine what actions you need to take and the options you need to offer to your employees and how to manage the deferred dollars.
How are you classifying the money you have received through these programs? We don’t know exactly how this will all play out, with reporting requirements, but we do know it is going to be required. Documentation is key. If you don’t have a process in place to manage the details, nor know where the funds have been absorbed, you should have a conversation with your bookkeeper or CPA.