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The rapid outbreak of the coronavirus is having a profound impact on business. As viruses know no borders, the impacts will continue to spread.

Below we have gathered the major Covid-19 related themes that our clients are talking to us about. We hope that that these can help you understand your exposures to Covid-19, and more importantly, position your business to be resilient in the face of this global threat.


The fluid and evolving nature of the Covid-19 situation has shown the need for very agile and flexible planning. It is testing our disaster recovery planning programmes in very real ways. Some fundamentals that we are seeing at our clients:

  • Executive crisis steering groups meeting on a daily and or twice daily basis.
  • Continued re-evaluation of decisions as more information unfolds – yesterday’s answer is often out of date.
  • Covid-19 will impact on every aspect of business: customers; suppliers; people; operations; financial; IT; physical and data security… You need to have the right people in the room to fully represent and consider the risks and impact on your business.
  • Planning for the a range of scenarios including the loss of availability of access to buildings, staff shortages, customer or supplier impacts.
  • Communication is vital. Misinformation is very unhelpful.


Productivity will undoubtedly be lost in many sectors in the event of a Covid-19 shut down. However we need to manage against a presumption of cessation of all business activities just because people can’t physically be at work. Some ways to ensure as much productive activity as possible is maintained:

  • Ensure availability of IT operations (see below).
  • Scheduled regular team calls to discuss output, activities and targets. This will need to be more frequent and more structured than the normal in-office meetings in order to make up for the loss of the everyday informal knowledge sharing.
  • Communicate with key suppliers and customers to clarify how much activity can continue during a closure. These plans should include:
    • Clarity over what activities will and will not be affected.
    • What assumptions you have over continued activities at your supplier or client.
    • What your supplier or customer can do to facilitate you to provide as much continued activities as possible.
    • Communication protocols to deal with the fluid nature of things.

Availability of IT operations

Availability of IT operations could be fundamentally important to minimise the impact of Covid-19 on your business. Some of the key things to think about:

  • If possible, everyone in the organization should have a laptop which is capable of remote connection. Users should be bringing this home with them every evening.
  • Test your continuity plan.
  • Have accurate distribution lists (email and SMS) in place for communicating with various groups of users throughout the course of the incident.
  • Need to plan for when key IT resources, e.g. system/network administrators, fall ill, how their roles are going to be covered and who their alternates will be.

Companies are fire-fighting on many levels. The Covid-19 virus has the potential to cause major business disruption and destabilisation. The situation is evolving very quickly. Flexible strategies, potentially including the use of short-term outsourcing options, will need to be devised and deployed to preserve trading activities and financial standing. This will require effective governance and real-time decision making, enabled by technologies.

Working capital/Cash management

Covid-19 related business disruption is highly likely to cause significant strain on cash generation and conversion.

Organisations will need to preserve and drive out cash flows, optimise working capital and enhance visibility over the level and timing of funding requirements.

This will involve developing and refining robust cash flows models and implementing rapid operational improvements, such as:

  • Analysing immediate and near-term funding requirements
  • Stabilising cash flow and buying time for negotiation with stakeholders
  • Driving improvements in cash collection
  • Prioritising cash outflows
  • Identifying cash generation opportunities
  • Reviewing working capital cycles and reducing the working capital requirements of the business

Debt servicing

Companies are experiencing adverse trading conditions which will inevitably lead to debt default and/or covenant breach events.  Navigating through this period will be challenging and requires evaluation of funding options together with negotiation of re-financing, covenant adjustments and facility extensions.  Lender relationships will need to be managed carefully as restructuring and/or recapitalisation options are worked through.

In today's just-in-time inventory management world our supply chains are going to be disrupted in the short term by Covid-19. A few mitigating actions that we should consider:

  • Talk to your suppliers and understand their contingency plans. They will be doing everything possible to minimise the problem as well.  They will also need to understand your plans to manage their risks. Openness, transparency and trust is required on all sides.
  • Agree communication arrangements to adopt to best manage arrangements and contracts during any disruption.
  • Analysis supplier risk/concentration and consider alternative sources as a back-up.
  • If stockpiling take care of the cash flow impact and the likelihood of any customer disruption.

Over the medium term we may need to reconsider the overall approach to supply chain management.

Ensure you are aware of the various tax implications that could arise, including:

  • The implications for your business if directors are unable to travel to attend board meetings in person.
  • The corporation tax, payroll/income tax and immigration implications of relocating employees to work outside of their usual country of employment.
  • Consider what your implications are of changing working arrangements (flexible, paid/unpaid, vacation, redundancy).
  • What are your obligations where you need to engage contractors?
  • What are your tax obligations if you change your supply chain?
  • Watch for any relieving tax measures such as extensions to pay and file deadlines and any other relief or incentive introduced. In this regard Revenue has outlined a number of measures, dealing with, among other things, VAT returns and tax clearance certs, as well as detailing advice aimed at assisting SME’s who may be experiencing cashflow and trading difficulties as a result of the impact of COVID-19. The announcement highlights, among other measures, that the application of interest on late payments is suspended for January/February VAT and both February and March PAYE (employers) liabilities and that current tax clearance status will remain in place for all businesses over the coming months. For more, read our COVID-19 guide for employers and employees.
  • Consider whether there are any implications of you/your company lending support to affected communities.

For further information, read our guides

  • Ensure you understand your contractual obligations.
  • If there is uncertainty around your obligations and entitlements, it is advisable to seek legal advice before engaging with contracting parties.
  • The virus outbreak could be deemed a force majeure event in certain jurisdictions.  What would this mean for your business?
  • Can contracts be signed and executed electronically?
  • Complying with contractual time limits – are they based on the concept of “Business days”?  What are the implications if governments shut down cities.
  • What to do if you need to suspend or terminate contracts or a contracting party is looking to do this to you.
  • How to deal with potential breaches of contract.

Companies should monitor the current and potential effects that the Covid-19 outbreak may have on disclosures and should strongly consider the following four items to help ensure that their financial reporting and audit processes are as robust as possible.

Periodic disclosures

Companies should consider their disclosure obligations regarding business risks related to the impacts of Covid-19 within the context of their local regulatory requirements. Disclosures should be specific to individual circumstances, avoiding broad or generic language.

Accounting and financial reporting, including subsequent events

Companies should consider whether economic uncertainties and market volatility have or will affect accounting conclusions. Additionally, companies should evaluate whether events occurring after the reporting period, but before the financial statements for that period have been issued, require disclosure or possibly recognition.

Ability to obtain information

A company’s ability to obtain and provide financial statements or information could be impacted. Companies with significant operations in countries affected may encounter delays in receiving financial data for consolidated financial statements as a result.

Internal control over financial reporting (ICFR)

Companies with significant global operations should consider whether there is any effect on internal control over financial reporting due to the local impacts of Covid-19. For example, new controls may be implemented and/or revised as companies start to modify IT access to enable remote workforces. Disclosure of material changes would need to be disclosed in ICFR.

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