The phones started ringing immediately when Congress passed the first legislation related to the economic effects of the coronavirus in mid-March. WellsColeman, a 37-employee firm in Richmond, Va., received a surge of small business client inquiries on related employment issues. In response, George Forsythe, CPA, the firm’s managing partner, scheduled a Zoom call with a labor attorney for his clients, which was attended by 85 small business owners.
Though he encouraged clients to send questions in advance, they submitted more in chat as the call progressed. “It was like the attorney was a panelist in a rapid-fire round,” Forsythe said.
Amid a global pandemic, CPAs have found themselves on the front line, providing advice and reassurance as small businesses struggle with economic uncertainty or closure during the coronavirus pandemic.
Clients in the toughest shape include restaurants and bars, breweries, hotels, salons, and entertainment organizations, most of which have been forced to shut down completely. CPAs have found that even clients in industries not as directly affected are facing problems with suppliers or receivables collection or with nervous customers shifting projects in-house, said Caleb Bullock, CPA, CGMA, director of development at 250-employee Somerset CPAs and Advisors in Indianapolis.
Some clients that are not feeling the squeeze right now expect to be hit later. They include contractors, roofers, painters, architects, and engineers who may still be at work but are scheduling few future projects.
“They’re worried that in three to six months, they will have to pinch pennies,” Bullock said. His firm is working with them on projection and modeling to determine whether it’s time to set up a line of credit or obtain other financing in case they need it later.
Putting out fires
Cash flow is top-of-mind for most clients. Mackey McNeill, CPA/PFS, owner of Mackey Advisors in Bellevue, Ky., used her firm’s own cash forecasting tool to help clients who needed it most.
“Having the right data is the first step,” she said. “The cash flow numbers might not look great, but the most important thing is to manage what you have.”
For one client in a nonessential business that was forced to close its doors during the pandemic, she performed a 16-week cash flow analysis that identified what cuts were necessary and how it might still generate revenue. That client had a good 2019 and, given its strong cash reserves, McNeill found that it could continue with no revenues until June. “It was nice to know they could make it that far,” she said.
Chet Buchman, CPA, CGMA, managing partner at 80-employee firm Swindoll, Janzen, Hawk & Loyd LLC in McPherson, Kan., said his clients most recently have also been asking about funding now available to them through the Small Business Administration Paycheck Protection Program (PPP). “They are being bombarded with information right now, and it’s confusing to figure it all out,” he said. (Access AICPA resources on the PPP here.)
Being the calming force
“As they navigate uncertainty, clients appreciate having a trusted person contact them with help and guidance,” Buchman said. “CPAs can be calm, consistent, and logical when our clients need it.”
At several of the firms interviewed, partners were keeping in regular touch with clients to monitor their concerns and experiences. “The biggest stressor is the unknown,” Bullock said. Sharing information and new developments helps minimize clients’ anxiety, he said.
Amid the demands of navigating client hurdles, CPAs believe that one of the best things they can offer is compassion and empathy. “This is the time to engage with your people and clients,” Forsythe said.
“CPAs have a passion for helping people,” McNeill said. “Right now, you can give them the information they need to look forward.”
For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page.
— Anita Dennis is a New Jersey-based freelance writer. To comment on this article or to suggest an idea for another article, contact Courtney Vien, a JofA senior editor, at Courtney.Vien@aicpa-cima.com.
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