Adverse effects of COVID-19 on SMME’s and how to navigate your way
Covid-19 has serious implications for people’s health and the virus has significantly impacted businesses and the economy. The pandemic continues to evolve and more businesses are shifting their efforts to return to their normal operations and planning for the months ahead. Normal in this case, is an unknown factor as the world at large is trying to find its balance in the continued fight against the pandemic.
The pandemic has changed the world of work and it will continue to do so for months to come. In an article by Medical News Today, experts have expressed the concern of this pandemic becoming an endemic, this simply means that it might continue to exist in the future. What this means for businesses is continued survival in an uncertain economic environment.
The effects of COVID-19 are experienced by organisations of all sizes and forms. Almost half (48%) of businesses reported a pause in trading in the period 14 April 2020 – 30 April 2020 and almost one in ten businesses indicated that they ceased operations permanently, this is according to StatsSA in an article titled COVID-19: Nine in ten businesses report reduced turnover.
It’s not all gloom and doom. Our government, big corporates, and civil society have joined forces to implement a multitude of relief packages that will assist SMME’s in overcoming the challenges faced due to the pandemic.
Our team has put together a summary of how you can navigate your way and ensure that your organisation benefits from the measures that have been put in place.
How to navigate your way:
- Be tax compliant
Managing Director at Axcelerate, Refentse Masha CA (SA) has stressed the importance of being tax compliant during this time. “business owners need to ensure that all their tax matters are up to date. This information is crucial when applying for any tax relief measures.” Masha pointed out that being tax compliant will tick the first box of requirements when applying for relief measures. A valid tax clearance certificate, as well as annual financial statements, are a crucial requirement to put your business in a better position to qualify for relief measures.
- Know what is available to you
Do your research and keep up to date with tax relief measures. This information is available on www.smmesa.gov.za and we also share some of the information on our website www.axcelerate.co.za
As a business owner, make it a habit of reading up on opportunities that will help you manage your business effectively.
- Get assistance
Accounting firms and Tax practitioners deal with these matters on a daily basis. They are best suited to give you advice and ensure that your organisation complies with the relevant requirements. Maintain a close relationship with your accountant and they will hold your hand through this process.
- Be patient
We have to admit that there are a lot of businesses in distress at the moment. Practice patience once you have applied for relief measures. Use this time to look at your expenses and cut down unnecessary expenditure and direct funds to the most crucial business processes. Your accountant can assist you with this process and ensure that your most crucial business processes are least affected.