ACCA sees long-term impact from coronavirus on organizations
The COVID-19 pandemic is likely to lead to long-term consequences for organizations, according to a survey of accountants around the world by the Association of Chartered Certified Accountants.
For the report, ACCA surveyed more than 4,500 of its members, including 156 finance professionals in North America, about the impact on their organizations and found there will be a slow return to normal. For North America, 40 percent of the respondents said employee productivity remains affected by the pandemic, 42 percent of organizations are focusing their time on the medium- to long-term stability and opportunities for their organizations over the next one to six months. Meanwhile, 40 percent of the respondents said customers have stopped or reduced their purchases, 37 percent indicated they are re-evaluating their social responsibility to the wider communities affected by the outbreak, 29 percent admit to cash flow problems, but 81 percent of organization’s leaders have planned ahead by completing a financial reforecast.
“The long-term impacts from the COVID-19 pandemic could be profound,” said Warner Johnston, head of ACCA USA, in a statement Wednesday. “Following the immediate outbreak, we have seen many employees working from home, many being furloughed, and in the medium-term there is a significant imperative for organizations to be thinking about how staff transition back into the workplace as lockdown restrictions ease. But longer-term the crisis raises fundamental questions about the future of work, and the nature of our working lives.”
Globally, the report found that 71 percent of respondents surveyed worldwide identified the transformation of working practices with less reliance on using physical space as the most likely long-term implication. Among the other global findings, 53 percent of the respondents said customer purchases have declined or stopped, 83 percent anticipate revenue to be down via-à-vis the previous financial year, 32 percent now see government interventions as effective, versus 17 percent in a March survey, 81 percent have now adopted flexible working from home strategies, and 82 percent of business leaders have now performed a financial reforecast since the outbreak.
Jamie Lyon, who wrote the report and is head of business management at ACCA, sees declines in customer demand as one of the main cultits. “Globally, the problem at the center of these issues is a collapse in customer demand for many organizations, with 53 percent of respondents citing purchases as completely stopped or reduced,” Lyons said in a statement. “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 survey also asked respondents about the effectiveness of recent government schemes, with 38 percent of respondents from North America rating the interventions undertaken by the government as effective. But challenges remain across many other countries.
“This is a global crisis, and governments, business and international organizations will need to work together to find solutions that will work for all at national, continental and global levels,” Johnston said in a statement. “It is vital that governments work together to develop national and international exit strategies that can support economic recovery post-the pandemic. Failure to develop and deploy comprehensive recovery strategies will only prolong the economic downturn and risk depression.”
Respondents in the United Kingdom were even more in favor of the government interventions by the U.K. government. “We also asked respondents, covering businesses large and small, about government support packages and their relevance,” said Claire Bennison, head of ACCA UK, in a statement. “The majority at 53 percent think the measures so far have been effective, but 13 percent remain unsure. It’s still important for the government to support businesses for the long term — especially SMEs, which we have been tracking for the last 10 weeks with the Corporate Finance Network.