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Global report reveals cross sector experiences of Covid-19

Date

27 Apr 2020

Sections

InfoSociety

The future viability of smaller firms has been brought into sharp focus as the pandemic continues, finds ACCA’s research report Covid-19 global survey: inside business, impacts and responses.

The research shows the severity of the pandemic’s effects, with continuity planning falling short across all sectors.

The global survey of over 10,000 ACCA members and stakeholders working in a wide range of organisations reveals the outbreak is particularly challenging for smaller organisations compared to their larger counterparts, with all sectors reporting distinct concerns about cash flow and growth.

Small businesses have a more pessimistic view than the largest organisations when considering both revenue and profit, compared with the previous financial year. Among business leaders of the smallest organisations, with fewer than 200 employees, 85% expect year-on-year revenue to be lower than the previous year, and 86% expect year-on-year profit also to be lower.

ACCA’s data shows almost one-third of organisations do not have appropriate business continuity plans (BCP) in place to respond effectively to the crisis. This is a particularly acute issue for smaller organisations, with 38% of those suggesting they do not have a continuity plan in place compared with 15% of firms with 1,000 or more employees.

Jamie Lyon, ACCA’s head of business management comments: ‘Not having a BCP can compromise the resilience of organisations’ management through the COVID-19 outbreak and could have significant implications for employees, customers, investors and all stakeholders connected to the organisation.’

Consistently, the biggest impact identified across every sector is reduced employee productivity. The public sector, at 69%, cites this issue most often, compared with 59% in not for profit, 55% in the corporate and financial sectors, and 50% in academia.

Cash-flow worries across the sectors vary: 39% say this is a concern in the corporate and financial world, compared with only 26% in the public sector. Again, cash flow, alongside broader challenges relating to reduced customer demand and supply chain disruptions, are more acute for smaller organisations.

Alex Metcalfe, head of public sector policy at ACCA adds: ‘Public sector finance professionals need to provide timely financial analysis, such as cash flow forecasts, to support the critical public services being delivered during this crisis. However, the research reveals that public sector members are less likely than peers in other sectors to have completed a financial reforecasting following the outbreak of the pandemic. The strength of the recovery will depend on rapid and effective government responses, with professional accountants having a critical role to play in supporting this response through the provision of timely information and analysis.’

When leaders were asked if they had performed a reforecast of their organisation's financial outlook for 2020, since the outbreak of Covid-19, only 35% in the public sector said they had, compared with 55% in the corporate sector and 47% in academia.

Jamie Lyon concludes: ‘Our report also reveals small but growing concerns about financing and debt obligations, which we could expect to rise in the coming weeks. The immediate picture is of focusing on short-term survival, which may worsen over the coming weeks and months. Many respondents see these issues threatening the very viability of their organisations over the next six months. The pressure will be on governments globally to sustain these organisations, and especially SMEs.’

The full survey can be found on ACCA’s website: https://www.accaglobal.com/gb/en/professional-insights/global-economics/Covid-19_A-Global-Survey.html

- Ends -

For media enquiries, contact:

Helen Thompson

E: helen.thompson@accaglobal.com

T: +44 (0)20 7059 5759

M: +44 (0)7725 498 654
Twitter @ACCANews
www.accaglobal.com

About ACCA

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 219,000 members and 527,000 students (including affiliates) in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 110 offices and centres and 7,571 Approved Employers worldwide, and 328 approved learning providers who provide high standards of learning and development.

Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

ACCA has introduced major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. More information is here: www.accaglobal.com

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