CFOs of large and small companies, active in the public and private sector, express concern about the effects of Covid-19 on staff, productivity and cash flow, according to a study by ACCA – Association of Chartered Certified Accountants on a sample of 10,000 by professionals.
The decrease in cash flow will have a strong impact on companies, affecting their viability. Authorities in many countries around the world have announced financial support packages for companies. However, the CFOs who participated in the ACCA study are reluctant to say whether they will make a major contribution. Eight out of ten business leaders consider a decrease in revenue and profit.
“The data collected globally confirms that the spread of Covid-19 will seriously affect most areas of activity, regardless of the size of the companies, region or countries in which they operate. The main problem in the business environment is the lack of predictability that does not allow a clear organization, reactions and correct estimates. Even if this period is very difficult, we must also look at opportunities and consider any options to allow large or small companies to survive, “said Jamie Lyon, Director of Business Management, Professional Research – ACCA.
The ACCA study was conducted to understand how businesses around the world are affected from the perspective of ACCA members – finance specialists, active in a wide variety of companies and organizations around the world.
The results create an overview of the medium-term implications, also highlighting the measures taken or planned by companies to mitigate the damage. The study also presents lessons that the business environment can learn from this pandemic.
“The findings for respondents in Central and Eastern Europe, including a group of 74 financial experts in Romania, show that the top three issues affecting businesses and leaders at this time of trial are: employee productivity, low orders and cash flow. Only 46% of business leaders have managed to change their budgets and financial forecasts for this year, and of these, 80% forecast a decrease in 2020, compared to last year “, says Andreia Stanciu, ACCA director for Southeast Europe.
ACCA recommends that companies and organizations now turn to traditional strategies for action in times of crisis. Three key elements are important:
- Act and respond sustainably, thinking long-term, paying special attention to employees and shareholders;
- Analyze the information collected from various sources and identify what can help you secure your business;
- Anticipate the impact on your business and the trends that are emerging.
Jamie Lyon, who led this research, says: “We are all affected, but the study shows that organizations and small companies suffer the most. Identifying sources of financing and balancing cash flow are common concerns in the business world, but for small companies these tasks prove much more difficult, with four out of ten small companies surveyed saying they do not have a business continuity plan.
“Overnight, the labor market changed. In the short term, leaders will face a difficult work environment, productivity and a low level of employee involvement, to which are added elements such as drastic drop in demand, problems with suppliers, low mobility, delays in launching products or services, stopping investments and so on “, adds the ACCA director.
“All these aspects are interconnected and affect the financial stability of a company. It is encouraging to see, however, in this context, the commitment of many organizations to support and protect primarily the health and interests of employees, customers and shareholders, “concludes Jamie Lyon.
The study reveals:
- 57% – Employee productivity is negatively affected
- 37% – Cash flow problems
- 29% – Customers postponed or reduced purchases in areas affected by the virus
- 24% – Customers postponed or reduced purchases, due to problems with companies in relation to suppliers
- 24% – Postponed the launch of products or services
- 21% – They blocked the hiring process
- Only 53% of organizations were able to adapt their financial estimates to the current situation, given the ever-changing environment and the duration of the emergency imposed by the pandemic, all of which contribute to a high level of insecurity in the business environment.
ACCA is holding a webinar in English today, April 16, from 1:00 pm to 2:00 pm, in which it will address the results of this research. The full study will be published on April 27, 2020: http://accamember.newsweaver.co.uk/invitation/1586s9wf53w
The study was completed on Thursday, March 26, 2020. During this pandemic, ACCA will constantly publish useful information and materials online at www.accaglobal.com/covid-19.
ACCA (the Association of Chartered Certified Accountants) is a global professional accounting group that offers qualifications to the highest standard, relevant in the business environment for dedicated, skilled and ambitious people around the world, looking for a career in the accounting world, financial and management.
ACCA has over 219,000 qualified members and about 527,000 students worldwide. They are among the most sought after and qualified accountants, working in an extremely varied number of fields.
In Romania, ACCA currently has around 1,400 members and 3,000 students and affiliates.