When external circumstances like the coronavirus impact business operations, focus on each affected area to control damage.

So many variables can affect your operations. As a business leader, you need to assess sales levels, personnel availability, operational inputs, equipment capacity, work teams, infrastructure quality and technological capabilities. Each of these considerations can impact your ability to achieve production and performance targets.

When a crisis strikes, several problems can surface, including:

  • Unpredictable sales volumes, with substantial increases or declines;
  • Variations in employee availability, affecting their hours or ability to travel. In some cases, workers may be entirely unavailable;
  • Supply chain disruptions;
  • Product scarcity or unavailability.

The keys to effective crisis management

If you want to minimize business impacts and maintain an equilibrium, you may need to adjust certain procedures. Carefully evaluate each variable impacting your operations, assess associated risk levels and establish priority actions.

Here’s a summary of what you need to consider.

Dynamic production planning

  • Clarify employee availability;
  • Assess supply chain issues and how they could impact production;
  • Assess your company’s capacity surplus or shortage;
  • Determine which tasks aren’t critical to business continuity and eliminate them in priority order;
  • Implement a dynamic production planning tool and increase planning cycle frequency;
  • Set up tracking mechanisms and schedule frequent checks with the sales team.

Technology optimization

  • Use available technologies to run simulations of different scenarios.

Actual cost reviews

  • Assess how volume fluctuations are affecting your variable and fixed costs, and determine your breakeven point;
  • Develop a plan for reducing fixed costs.

Implementing these actions can help you control costs and improve operations. When combined, small actions can make a big difference. Do the right thing for your business’ future by preparing for the unexpected.

Our operations analysis experts can help you implement fast and effective solutions so that you’ll be ready for whatever lies ahead.

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Supply chain management is critical for many businesses. When a crisis hits, you need to proactively reinforce your supply chain so that you can continue meeting customer demands.

It’s important to take a structured approach to logistics planning and organization so that your business doesn’t find itself in a tough situation. Effective planning can prepare you for issues such as:

  • A supplier being out of stock;
  • Delayed delivery times;
  • A supplier being quarantined;
  • Shipping and distribution problems.

Meanwhile, internal issues could affect your ability to pay suppliers on time or meet your contractual obligations with them.

All of these factors could impact your operations.

How to secure your supply chain

Start by assessing the situation quickly and then moving forward with an action plan aimed at preventing problems and implementing solutions.

Monitor inventory levels

  • Keep an eye on variations in sales so that you can effectively estimate needs;
  • Establish critical inventory thresholds and build stockpiles as needed;
  • Create quarantine areas for certain goods;
  • Use the special inventory and restocking features in your management systems.

Strengthen relationships with customers

  • Find alternative shipping methods;
  • Adjust customer delivery schedules based on your suppliers’ ability to replenish stocks—and don’t forget to add a buffer;
  • Contact your clients and be transparent about the situation.

Cement relationships with suppliers

  • Control cash flows so that you can pay for shipments upon delivery;
  • Determine who your critical suppliers are and check in to see how the situation is affecting them;
  • Look for replacement suppliers as needed and contact them as quickly as possible;
  • Negotiate payment terms with your suppliers.

All businesses will be facing a certain degree of volatility in the coming weeks, which will force them to be flexible in their operating procedures and dealings with suppliers and partners. There are several factors that can influence supply chains, and these factors can change quickly.

Now is the time to look ahead and take action before issues arise. But rest assured that you don’t have to do this alone. Our team is available to help you get through this challenging period. Put our expertise to work for you. Together, we can weather the storm.

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The coronavirus outbreak is affecting businesses around the world and forcing entities to carefully examine how the situation might affect their financial reporting. This IRFS Alert looks at the impact of the coronavirus for the year ended on December 31, 2019.

Is the coronavirus crisis considered a post-reporting period event (also known as an adjusting event) for the year ended on December 31, 2019?

  • Entities should review IAS 10 – Events after the Reporting Period to determine whether or not the coronavirus crisis is an adjusting event.
  • We believe COVID-19 surfaced and spread in 2020 and that there is insufficient evidence that it existed at the end of the reporting period on December 31, 2019. This therefore makes the outbreak a non-adjusting event.
  • Entities should ensure that the valuation of their assets and liabilities as at December 31, 2019 is not affected by the coronavirus crisis, which occurred subsequently.


Entities must disclose if a non-adjusting event has had a significant impact on their financial statements. Any such disclosure must include the nature of the event and either an estimate of its financial impact or an indication that the impact cannot be estimated.

Do you have questions about the coronavirus’ impact on financial reporting?
Our team is here to help.

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When an unexpected event like the COVID-19 crisis disrupts your operations and threatens your business’ financial health, you need a clear understanding of your financial situation so that you can make timely decisions.

Now more than ever, you need to optimize each of your business’ key processes and procedures.

This involves assessing the company’s short-term situation and reviewing its treasury management. Specifically, you want to optimize your cash flow, financial risk, funding sources and working capital, while looking to defer certain payments or negotiate instalment payments.

Here are three recommendations for effective cash management in a crisis situation.

1. Evaluate your current situation and financial health

  • Analyze your working capital

These are, of course, accounts receivable, accounts payable, cash assets and credit facilities.

Resist the temptation to be overly optimistic. For example, don’t count on funds from clients whose account is already in arrears. If they weren’t able to pay you before the crisis, it’s unlikely they will now.

  • Make sure you have a clear understanding of your credit facilities, guarantees and margins

For example, do you have equity available to obtain additional financing or margin coverage?

Identify your priority debts and repayment concerns

You might need to negotiate new repayment terms. Government authorities are likely to be accommodating in light of the current situation.

2. Create short and long-term plans for your cash flows under different scenarios

  • Calculate past sales and expenses

This will ensure that you understand your operating cycle.

  • Review your sales prospects

Be realistic— or even conservative—in your estimates.

  • Try to quantify the impact on your expenses

Do it to the best of your knowledge and based on your assessments of the current situation.

  • Revise your investment plans

It is important to review your capital investment plans.

  • Analyze your financial structure

Analyze your financial structure and repayment obligations.

Once you have all this information, you can prepare a cash flow budget to give you a better idea of what the next year will look like. Test different scenarios and see what your financial needs are.

3. Develop a cash asset protection strategy

Look for potential financing sources

If you anticipate having cash flow issues, look for potential financing sources. Be proactive and approach financial institutions. Build trust with your financial partners by being transparent. Remember that they will be some of your most important allies.

Learn more about the recently announced government assistance programs

You’ll want to apply as soon as possible to reduce wait times.

Repeat these steps regularly

Things are evolving rapidly right now. Take control by reviewing your treasury management plans.

Technological solutions for a better management

This crisis might have raised performance issues with your management tools. If that’s the case, consider switching to cloud-based treasury and payment management technological solutions to help you weather these turbulent times, and future crises. These reliable tools will boost your credibility and earn you the trust of your clients, partners and suppliers.

Today’s unprecedented situation quickly derailed everyone’s best-laid plans. But if you follow these tips, you should be able to handle whatever the future has in store. We’re here to help you get through it.