COVID-19 Pandemic has not only wreaked havoc on human health but business health as well. With the financial year, 2020-21 started amid a lockdown, keeping the business alive has become a challenge. From the aviation industry to stock markets to the entrepreneurs having an online store of rakhi gifts to the local shop owners; no sector seems to be untouched from the perils of the CoronaVirus outbreak.
Though we have moved towards the unlock phase, still the businesses haven’t revived to their former glory. With many business sectors incurring considerable losses to several companies laying off their employees to most of them having been forced to shut their operations, the business sectors must manage their finances wisely in these times of uncertainty.
So, we have outlined tips for prudent management of business funds for financial security, till we get back to the good old happier times.
1) Separate Your Business and Personal Accounts: Separate your business and personal finance accounts. If you do not have one, consider opening a separate business account. This step will keep your business and personal finances organized.
2) Review Your Costs: Keeping a track of business costs is always a good practice. In the current situation, it is vital. On a regular basis, review your costs and analyze your essential costs. In this way, you can cut down on costs that are unnecessary.
3) Liquidate Your Assets: Liquidate your assets if needed, during these hard times. If your paycheck or business is affected by the outbreak, you must have the means to access lines of credit, and this is one option. You can liquidate your assets like additional property, equity, gold rakhi bracelet, other pieces of jewellery, etc.
4) Re-Evaluate Your Business Investments: Check your investment goals. Because of the harsh times, it may not be feasible for you to invest as much as you may have thought earlier. The target should be to save at least 30% of your investments for yourself. Plan your business investments according to the current situation and scenarios.
5) Short-Working Hours: Companies that are facing a downturn in their online orders due to the coronavirus outbreak can take advantage of short-time working allowance. This step allows the company to reduce the working hours as long as atleast 10% or the workforce is affected.
6) Avoid Credits: In crucial times like this, you should eliminate the option of borrowing money or taking credits from friends or other associates. Avoid using credit cards for transactions and put into use debit cards until the financial crisis is over.
7) Tax Assistance: Take Tax Assistance. This financial year, the taxpayers will be able to choose between two sets of tax slabs. You can either opt for the new tax rates or stick with the existing ones. Many governments have eased liability for business taxpayers. For matters relating to tax, consult tax advisors or accountants for help.
Yes, the times are tough for business, regardless of nature and size. But, proper management of funds and conduct of business as per the new trends and situations can help the business going.