ACCOUNTS PAYABLE & COVID-19: PREPARING FOR THE SHORT-TERM IMPACTS AND EXAMINATION OF WHAT LIES BEYOND
More rapidly than anyone would have imagined, the Coronavirus has placed a greater strain on businesses worldwide more than any other natural phenomenon in recent memory. Before it ends, this may turn out to have the single biggest global impact in history. In addressing the situation in regard to your AP operations, there are two things to consider.
- What do you need to take care of right now? Over the next few weeks and months your immediate focus should obviously be the health and safety of your employees, customers, clients and partners. What measures do you need to take today to ensure that is accomplished?
- How will this situation impact your business once the crisis has passed? In the coming months, you will learn things about your operations and processes. You will learn how well equipped (or ill equipped) your team is to handle the next emergency situation. On a positive note, you may also discover new opportunities to improve the efficiency of your department. Although it may be difficult to think long term while you are pressured to meet the immediate needs, try to keep the future in mind.
ADDRESSING THE IMMEDIATE NEEDS
If your office already has a disaster recovery plan in place, you are likely a step ahead. Now is the time to pull out that plan and put it to good use. This is not a drill. Most plans have contingencies in place to deal with issues such as a fire, severe weather, or similar business disruptions. While parts of that plan can certainly be applied to the current crisis, those contingencies probably address the closing of your office for a few days or a week at most. With CDC guidelines changing daily and the potential for extended work modifications, you may need to look beyond your established plan to fully work through this issue.
Whether or not you have a disaster plan in place, the need for action regarding the current situation is immediate. Some elements of a fully functional recovery plan will require time to put into place. However, there are many steps you can take NOW to deal with the impact of Covid-19. In some cases, these steps are now considered mandatory as opposed to voluntary.
- If you never heard the term “social distancing” before, you likely have heard it in the media recently. Face to face meetings are often unnecessary and should be avoided whenever possible. Conduct meetings remotely, using phone conferencing or video. If face to face is necessary, ensure there is enough room to allow 6 feet between participants.
- Encourage all of your employees to follow the CDC guidelines regarding hygiene. Post reminders about good hand washing technique. Everyone has heard it before and everyone knows what they should do, but regular reminders have been proven to actually help build proper habits.
- Keep a clean house – regularly wipe down surfaces that are touched by others – keyboards, phones, and desks. If possible, provide access to hand sanitizer.
- At least temporarily, it’s time to eliminate the iconic business staple – the firm handshake.
- Show your employees that you’re serious about having them stay home if they’re sick by sending anyone home who shows physical signs of being ill. Incidentally, this also includes YOU. If you, as the manager or director, show signs of illness, you MUST set the right example and take the required time off yourself. Talk to Human Resources about sick leave policy. Ensure that your policies are flexible and consistent with public health guidance.
- You have limited control over contract employees who are working in your building. As such, you should consider suspending any outside associate activity (auditors and consultants) for a period of time. If it is critical that they be on-site, have a discussion with the Company to make sure they are clear on your own policies and that you expect them to follow suit.
- Restrict or eliminate travel completely – including conferences and seminars. Most events have likely already been cancelled. Any non-essential travel should be eliminated.
- If you have the systems and security in place, encourage (or make mandatory) remote working. If you can put this in place, it is probably the single biggest impact you can make.
Although right now, it seems like there is nothing but bad news regarding the impact of the virus, the crisis will end eventually, and businesses will return to normal. However, there are a few things you should consider revisiting after the dust has settled.
- Where did your emergency preparedness breakdown? You will almost certainly find areas in which your department could have done better. Make a note of those now, so you can give them more consideration after normal operations have resumed.
- Does your organization/department have a disaster recovery plan? If not, this situation will emphasize the need for one. Although the next emergency will most likely be a different animal, there will probably be similarities. Having a general plan in place at least gives you a good foundation, a starting point to fine tune your response to meet the specific needs of the crisis. If you do already have a plan in place, lessons learned now may provide the opportunity to modify and strengthen your plan and eliminate gaps.
- Which team members rose to the occasion? Not everything learned about your team and department are negative. Perhaps your entire team or certain individuals went well beyond expectations and showed true leadership and ingenuity. You may discover someone has management ability that you previously overlooked. If performances under pressure warrant, be sure to recognize those individuals and note how their contributions helped to get you through the crisis.
- What “emergency” measures worked well? During this situation, you may discover opportunities to streamline and implement processes that improve the efficiency of your department. For example, you may have discontinued a function that you thought was needed, only to find that there was no downside while you ceased to perform that function. If you implemented remote working for some or all of your employees, you may find that productivity actually increased during the period of time they were working from home. Perhaps that is an opportunity that you want to pursue further as there can be many cost saving and productivity advantages.
Obviously, we all hope the current situation ends quickly and positively for the nation and the world. We can all do our part to make that happen through diligent efforts and common sense. Putting emergency measures in place as quickly as possible is our best defense. While working to address the Covid-19 crisis today, tomorrow, and over the coming weeks and months, we should also remember the crisis will pass. When it does, our best hope is that afterward, we are stronger, wiser, and better equipped than we were before.
Please contact us for any support you may need during this time, as always.
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