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ACCA Unveils Recommendations To Support Business Recovery

ACCA (Association of Chartered Certified Accountants) Covid-19 Global Survey Reveals Urgent Need for Malaysian Businesses to Enhance Business Continuity Planning

Image by Igor Ovsyannykov from Pixabay

The impact of the global Covid-19 crisis is felt by Malaysian businesses of every size and across sectors, with limited cash-flow affecting smaller organisations to a greater extent. Delving into these and many other concerns faced by countless businesses, the ACCA Covid-19 Global Survey: Inside Business – Impacts and Responses gathered input from over 10,000 respondents, including 919 finance professionals in Malaysia. 

Results revealed that:

  • Many Malaysian businesses are not prepared to face a crisis like this; less than half (47%) had implemented a business continuity plan (BCP) and a third (33%) had no BCP at all.
  • Difficulties with cash flow could see almost a quarter (24%) of businesses fold within 6 months, and almost half (49%) within 12 months.
  • Nearly half (49%) of respondents predict losses in 2020. Two-thirds (66%) expect revenue and profit to decline by at least 10% year on year; 64% anticipate the worst case being at least 25% reduction year on year, and 40% expect a plunge of over 50%.
  • Despite these circumstances, 80% have made efforts to ensure employee health and safety.

The survey results also showed that Malaysian and global businesses shared broadly consistent challenges. Jamie Lyon, the report’s author and Portfolio Lead – Professional Insights, ACCA, explained: “Everyone’s hurting, but particularly the smaller organisations. Financing and cash flow are concerns to everyone across all the countries polled.”

To support businesses during this time of uncertainty, ACCA has developed a valuable resource to help sustain organisations, summed up in three A’s:  

  • ACT and respond in a sustainable manner, focussing on employees and other stakeholders 
  • ANALYSE different information sources to plan for different survival and recovery scenarios 
  • ANTICIPATE business impact and future trends to allow proper planning for recovery steps and future strategy

Thus far, 58% of Malaysian business leaders have completed a financial reforecast of their organisation’s revenue and profit outlook for 2020, indicating that uncertainty over the extent, duration and scale of the Covid-19 outbreak was the most significant barrier to a reasonable reforecast.

Edward Ling, Country Head of ACCA Malaysia said: “The survey has given us tangible data and deeper insights into what businesses are facing, as the financial ecosystem is interconnected at a fundamental level. In facing these challenges, there is a key role for professional accountants to play, lending their expertise to assess, analyse and present recommendations for improvements and recovery, as well as to enhance the robustness of their BCP to better cope with crises.” 

“As we all face the uncertainties that affect the ability of organisations to plan properly, to react and to forecast appropriately, we continue to urge all organisations to consider every opportunity and option available to keep their businesses, large or small, afloat. We hope that the recommendations for businesses to Act, Analyse and Anticipate will prove to be valuable in the face of this unprecedented situation,” added Ling.

Download the full set of recommendations, and check out more information and resources on managing businesses during Covid-19.

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