As a bookkeeping services provider, we wanted to reach out to you with some helpful information which may aid you during this unfolding situation. We want you to know that we are here working for you “business as usual” since we have always operated with Home-Office based staff. Below are some thoughts that we wanted to share with you, and if you have anything else that you think we should know, please do not hesitate to contact us.
COVID-Related Short-Term Planning:
- Consider a change in delivery of your services and advertising/marketing strategy for your business that may allow you to have a revenue stream other than your standard source.
- Now may be the time to reach out to an online platform for servicing if you haven’t tried that in the past.
- If you are a business that has cash on-hand look at the type of account you have it held in. Make sure your bank and/or the account is FDIC-insured for the maximum amount. If it is not, then consider a change, or review the set-up further to ensure that you are comfortable with the security of the account type.
- Governments here in WA are offering extensions of time for filing and paying taxes. This applies to Business B&O and Sales tax.
- This doesn’t NOT mean you won’t have to pay them! It just means you have more time to pay them so you can use your cash to operate the business, in a sense an ‘interest free’ loan from the government by using the tax money to pay for operations.
- Please remember you will need to pay these eventually even if they continue the extensions. I am thinking they will offer continuances if the shut downs continue.
- We will be requesting the extensions where possible for all of the businesses we work with.
- Think about the 4/15 upcoming Estimated Tax Payment for 2020. You may want to consider holding onto your 2020-ES-1040 payment to reserve cash for other purposes. If you are expecting a major reduction in your business profits for 2020 then you will not owe as much personal/business income tax for 2020. If that is the case, then sending in this payment on 4/15 will be using cash you don’t have, and then you can’t get back until after you file taxes for 2020 in early 2021. If you do end up owing that tax we can get that payment sent this summer once we know more about the status of the COVID affects.
- If you have, or will be realizing a significant change in net profit/loss you may want to consider changes to the shareholder reasonable salary vs distributions in order to preserve cash.
- As we all watch, the markets are taking a serous hit. Check with your financial advisor for advice before making ANY changes to retirement plans or contributions. As of now, nothing has changed for retirement contributions, so you will need to continue to contribute to retirement plans for your employees as per normal. As my advisor said, “I will be getting more shares when we contribute while it’s down……”
- In about 4 weeks, it is a good idea to call your Business Insurance Agent about what the options of “Pausing” your business and vehicle insurance premiums are. (If vehicles will be parked, or offices closed, may be able to pause Auto or Premises Insurance).
- Consider reducing each budget line item for your business by a small percentage to reduce overall costs.
- Consider placing a temporary hold on new programs, services, raises, gifts you have implemented for 2020. This doesn’t have to mean they aren’t going to happen but just put them off for a month or two so you have time to see the overall impacts of this situation and are here to make that decision then. You can always make increases retroactive if you have weathered this situation without a negative impact to your cash.
Here are some helpful links for our small business owners and managers to follow at this time:
- Gov. Jay Inslee site for business and employee resources
- Employees may be eligible for Paid Sick and Safe Leave
- Check the Governor’s website as the State Unemployment benefits have been applied more generously to employees of businesses effected by COVID
- US government is looking at passing a stimulus directly to each citizen for direct cash payment
- [we do not have a central online website for this, since the program doesn’t exist yet – please watch for news on this]
- Small Business Association (SBA) will continue to have up-to-date information about the COVID-19 Disaster Loan options
- JB Consulting Systems site – blog
- This is our Human Resources partner, and their team is working hard to keep local businesses informed on how the current and changing Laws apply to this situation.
- Your employees’ eligibility for PSSL and PFMLA is currently being discussed in Olympia, and JBCS is keeping up-to-date on this, so monitor this blog carefully.
As your bookkeeping firm we are here to help you. We will help in any way we can.
Stay safe everyone,
Jill and Juli