Beyond the immense impacts the coronavirus (COVID-19) outbreak is having on public health, the pandemic directly impacts economic activity and poses unique challenges to businesses across industries because of its potentially compounding and unpredictable consequences.
With massive quarantines, travel restrictions and factory shutdowns, companies are struggling to quantify potential exposure. Attempting to mitigate potential losses from an unknown number of variables is daunting, especially when the situation is changing daily.
Understanding how to determine and capture lost revenue and income stemming from this unpredictable outbreak is critical to minimize financial implications. Here are some questions you might ask to help navigate uncertainty moving forward:
1) How prepared is my organization? What does “prepared” look like to our organization?
- Conduct a business continuity risk assessment to identify potential internal operational, financial and market risks; determine direct and indirect impacts; and generate an action plan.
2) What are our organization’s capabilities, strengths and weaknesses, including across the supply chain? Which third-party risks do we have, and where are they concentrated?
- Identify ways to diversify your supply chain if possible and assess the cost-benefit of maintaining duplicate facilities or routes on an ongoing basis. Identify alternate sources should your primary source of supply be unable to deliver on services.
3) Have we clearly communicated to our workforce what steps they should take and how they should respond to different scenarios identified?
- Employees working remotely, meanwhile, will need secure remote access to necessary files and services, likely using a VPN, as well as collaboration tools including instant messaging apps, project management platforms and shared documents.
4) What is our organization’s insurance coverage, and do we have funds to support this crisis? Does your organization have coverage for an insurance claim?
- Evaluate your insurance coverage for business interruptions. Identify the impact from service interruption, supply chain interruptions, and higher costs related to workforce disruption.
5) Do we have a proper plan in place for Cash Management?
- Consider the impact on your daily operations and cash management. Review how deposits are handled, discuss with your bank options for lock-box or other cash management products. In addition, consider automated payables programs that can assist with approval and payment processing.
The Wiss Business Advisory team specializes in business continuity planning and creating operational and technical efficiencies through our Business Process Review.