Irrespective of size, sector or country, the economic and social impact of the pandemic has expanded, and challenges are growing for business and the accountancy profession, reveals ACCA’s Covid-19 global survey ‘The Road to Recovery’.
Following March 2020’s original report, three months on the picture now crystalises many key issues that need to be addressed by policymakers and governments. ACCA is calling on governments worldwide to review economic rescue packages and enable a return to sustainable growth.
Jamie Lyon, the report author and head of business management at ACCA explains the unavoidable challenges many are experiencing: ‘The problem at the centre of these issues is a collapse in customer demand for many organisations, with 53% of respondents citing purchases as completely stopped or reduced. It’s a domino effect, with both product launches and investment plans being deferred, further compounded by supply chain challenges and issues with customer order fulfillment.’
The data for June reveals continued cash flow challenges, with almost half of respondents saying this is a problem. Since the March research, the new data reveals greater concerns over financing and debt issues, and given the global economic climate, it means these will be difficult matters to resolve.
However, amidst the headline findings there are glimmers of good news: 82% of business leaders have now performed a financial reforecast since the outbreak. In March, this raised red flags with only 53% having done so. Other global findings reveal: 83% expect revenue to be down compared with the previous financial year and 81% have now adopted flexible working from home strategies, with 50% adopting staff rotas to accommodate social distancing requirements.71% identify workplace transformation as the longest term Covid-19 impact and 32% now see government interventions as effective, compared to 17% in March 2020.
Jamie Lyon adds: ‘Yet again, we see the impact hitting hardest on SMEs. Almost 60% of SMEs cite customer purchases stopping or reduced, a marked increase from our March survey where less than a third said this was the case. Cashflow is being impacted, and this is highly likely to persist.’
The poll also asked respondents about the effectiveness of recent government schemes, with two thirds of respondents from China and Singapore rating the interventions undertaken by their government as effective but challenges remain across many other countries.
Looking ahead, firms are broadening their horizons, focusing more of their time on medium-and long-term planning – fewer than one fifth of organisations are mainly focussing on the short term of 4 – 6 weeks.
Jamie Lyon concludes: ‘The pandemic has had a profound effect that will resonate well beyond 2020. The crisis has raised fundamental questions about the future of work, and our working lives. 71% of respondents identified the transformation of working practices with less reliance on using physical space as the most likely long term implication. However, according to our data, there are other potential long-term implications too – including scaling -up of digital investment, a continued prioritisation of employee and customer health, and possible global supply chain transformation.
‘Through our “roadmap to recovery”, we’re recommending that organisations follow the “three As” – Act and respond sustainably to the immediate crisis in the short term; Analyse the different information sources to start to build the path to recovery in the medium term and Anticipate how strategies need to evolve over the longer term.’