Both big-business leaders and small-business owners know that navigating their organizations through times of unprecedented challenge is difficult, and planning for the future can seem nearly impossible. One way to survive in the short term and prepare for long-term growth is to adjust to changing market dynamics. Here are three ways you can find relief for your business now and help it thrive down the road.
Working from home has become a necessary tool that businesses of all kinds are utilizing so they can continue to operate. While it’s not feasible for some types of employees to work from home, many who rely primarily on technology to perform their jobs can function well remotely. When considering remote working as a forward-looking solution, connecting with a human resources professional who can assist with developing new policies or enhancing existing remote-work practices may be helpful. Some positive aspects of remote work for businesses include:
- Cost savings. Whether employees work from a room in their home or another remote spot, alternative venues often save employers money and may offer a more desirable work environment than office space provided by an employer. That can create a win-win situation.
- Happier employees. Allowing employees to work remotely can increase morale, improve productivity and boost retention. Many employees find that they function — and focus — better remotely than they do in an office environment. Plus, eliminating commutes often helps reduce stress and leads to employees feeling more empowered to work in a way that suits both them and the business.
- Better connections. Smartphones, along with new business trends like cloud-based project management, remote administration video conferencing and more, are extending the effectiveness of remote work. Reviewing your business’s — and your employees’ — technology setup is important to maximize communications, collaboration tools and security features. Your workers might need enhanced equipment to work from home and stay connected optimally.
Relief Through the CARES Act
The Coronavirus Aid, Relief and Economic Security (CARES) Act, enacted by Congress in March, provides relief for employers and employees in numerous ways that may not be well known. For example:
- Payroll-tax payment deferrals. Although payroll taxes will still be owed, businesses can delay payment of the employer’s share of Social Security taxes (i.e., 6.2%) attributable to the period beginning March 27, 2020, and ending December 31, 2020. Half the deferred amounts must be paid by December 31, 2021, and the balance paid by December 31, 2022. Talk with tax and accounting professionals to see if this is the right option for you, and to ensure you understand when payments are due. Penalties for noncompliance can add up quickly.
- Student loans. The CARES Act allows employer-funded repayments of employee student loans to be excluded from taxable income for employees, yet still be a tax deduction to employers. The existing exclusion for up to $5,250 of employer educational assistance, which currently applies to expenses such as tuition, fees and books, is expanded to include employer repayments of student loans. This unique provision applies to the student loans of employees who have already graduated. If you are an employer and 2020 pay increases don’t seem feasible, making employees’ student loan payments for them may be a benefit for them and your business. This short-term benefit will end on Dec. 31, 2020.
Rethinking Business Processes and Workflow
The pandemic has disrupted business as usual, which makes it even more important to look for ways to increase operational efficiency. Improving business processes can help increase your company’s value by reducing costs and risks, and enabling the business to be managed more easily. Efficient processes take less time to execute, often have fewer steps and can make wasteful activities more obvious and, therefore, easier to eliminate.
To stay ahead of industry trends and increase the efficiency of our own processes, my firm began offering remote accounting services to our clients in 2006 (essentially, where the duties of an entire accounting department are done virtually, in the cloud). We incorporated some rather simple changes, such as moving business processes from paper to online, that will likely provide benefits for years to come. Overall, we advise our business clients that having measurable, predictable processes in place means those processes can be put into systems. The systems then create outputs that can be known without the need to observe them directly.
The coronavirus pandemic has created disruptions to daily life, business operations and the overall economy. With a few relatively simple shifts in focus and smart, adaptive moves, you can position your business for success now and in the days to come.