New Zealand’s move from COVID elimination to suppression represents a significant change in our approach to COVID, and Chartered Accountants are helping businesses navigate this new COVID reality says Chartered Accountants Australia and New Zealand (CA ANZ).

“Chartered Accountants are helping businesses to do everything possible to prepare for our new COVID reality,” said CA ANZ NZ Country Head, Peter Vial FCA.

“The new strategy means the potential for more freedom if we can hit a 90% vaccination rate, but localised lockdowns, supply issues, labour shortages and unpredictable consumer demand remain.  Businesses need to be prepared for these and other challenges as part of our new COVID reality.”

“The new strategy is good news, but the challenges now is reaching 90 per cent.  It is a very high threshold, with only one country, the United Arab Emirates, having met it for both two doses of vaccine in its population.”

“Bumping up the Resurgence Support Payment is the right move to help struggling businesses. Vaccine certificates and the traffic-light system does provide some light at the end of the tunnel for businesses, but it’s going to take time to implement.”

“We have to be prepared for a range of scenarios, depending on how long it takes to reach our vaccination target.”

In preparing clients for the change in strategy, Chartered Accountants from around New Zealand recently met and shared their advice for businesses and clients on our new COVID reality.  Here’s what they said:

Keep an eye on changing COVID workplace best practice and get ahead now: “Maintain the confidence of your customers by improving tracing, masking and sanitising.  We’re in a leadership position on this,” says Christine McNamara CA, Managing Director at BB&S in Dunedin.  “Make it easy for your staff to get the jab, by providing time to do so, time-in-lieu, or other incentives, so we can hit our 90% vaccination target.”

Don’t under-price yourself: “In tough times it may be tempting to offer a hefty discount, but on average, a 1% price increase, assuming volumes remain the same, would deliver approximately a 6% to 8% increase in operating profit,” said Mike Atkinson FCA, Director at Auckland’s Bellingham Wallace.

 “This impact to profit is typically 50% greater than a strategy of reducing variable costs by 1% and three times greater than a 1% increase in volume.  Price is just one of three areas in which business need to beat or meet the market, with the other two being customer experience and product offering.”

“Inflation is running hot, and likely to be increasing the price of inputs,” said Peter Prema CA at Auckland’s BetterCo Advisory & Accounting.  “We are working with businesses to review the price of their products or services.  If their price hasn’t increased in the last 12 months, it’s highly likely they’re undercharging and putting additional strain on their business.”

Get your head in the cloud: “One of the challenges our clients face is how they get their audit completed during these uncertain times,” said Whanganui based Silks Audit Director Talia Anderson-Town CA.  “The new norm is virtual audits, meeting on Teams or Zoom and accessing records through cloud storage.”  The end-product is still the same, but how we get there is up to ‘me mahi tahi tatou’; us working together.”

Forecast for four seasons:  “Business owners need to forecast a range of economic scenarios that factor in both domestic and international border closures, and traffic light changes,” said Floyd Wicksteed CA at New Plymouth’s Schurr & Ireland Chartered Accountants.  “Particularly when dealing with your bank, they will see an engaged and organised business and that makes a real difference.  No one has a crystal ball, but a handful of forecasts will help maximise growth or ride out the doldrums.”

Get the information you need to take a risk: “Uncertainty is the hot topic right now, particularly in Auckland, and is one of the biggest barriers for business growth,” said Auckland based Luke Kemeys CA at Next Advisory.  “Business owners should seek out well-informed decision makers who can help them take action.  We all need to take risks to progress towards our goals, and having the right advice is vital.”

Plan ahead for supply issues: “Contrary to what many thought at the outset of the COVID pandemic, the issue hasn’t been lack of demand, but rather lack of supply,” says Michael Grace CA at Grace Team Accounting in Tauranga.  “We’re encouraging all of our clients to work through updated sales forecasting to secure additional stock at key times in the year.”

No. 8 wire ingenuity: “Whether it’s fixing known variables such as interest rates, using tax pooling to manage short term cash-flow or reviewing your structure and assets, look for efficiencies or workarounds to your COVID related issues,” says Grant Eddy CA of Waikato’s CooperAitken.

“Seventy-five percent of possible productivity comes adopting existing best practice or catch-up improvements, and the remaining 25% from innovations beyond today’s best practices,” commented Mike Atkinson FCA.  “An independent review can highlight improvements in plain sight.”

Work with what you’ve got: “Whether labour shortages, stock outages or missing and sometimes hiding customers, we’re helping clients play Lego brickmaster to re-arrange the pieces they have,” said Sarah Walker CA, Director at Hawke’s Bay’s Epplett & Co.  “That means investing and empowering their people, re-designing their business to suit the resources they have or directing team onto customer-focussed, value building activities.”