The role of the accountant amidst the COVID-19 pandemic


We are not in normal times and all hands are needed on deck to save lives, businesses and the world. The world is currently dealing with what may well be the greatest distraction in trade and commerce since the Great Depression. The degree and speed of collapse in activity that has followed is unlike anything experienced in history of the world. Governments around the world are providing unprecedented support to households, firms, and financial markets as well as engaging policymakers in assessing potential threats and finding the best ways to avoid those threats during and after COVID-19.

According to Gita Gopinath (2020), the April World Economic Outlook; projects global growth in 2020 to fall to -3 percent under the assumption that the pandemic and required containment peaks in the second quarter for most countries in the world, and recedes in the second half of this year. This is a downgrade of 6.3 percentage points from January 2020, a major revision over a very short period. This makes the Great Lockdown the worst recession since the Great Depression, and far worse than the Global Financial Crisis.

The President of Ghana, on Sunday, April 5, 2020, announced some covid-19 interventions to lessen the impact of the coronavirus on individuals and businesses in Ghana. This article does not however sort to justify the effectiveness or ineffectiveness of these interventions by the government, as the main focus is to make an input as to how Accountants can play a pivotal role in providing professional services for their respective businesses amidst this pandemic.

As Health sector professionals are doing their best in saving lives, the Accountant as a major key player in the field of business has a major role in sustaining business during and after COVID-19 crisis.

In recent times, Accountants` work have become more sophisticated and requires them to play a varied role in business. Traditionally, their role was to maintain financial information in an organized manner. Now, Accountants also analyze the information and partake in the decision making process and becoming an important asset of the business. Just as a ship needs an anchor to hold the vessel in all weathers, a business also needs an Accountant. The modern day Accountants are guided by professional standards, and equipped with knowledge and expertise to handle a wider number of roles in business.

The COVID-19 crisis is a critical time where Accountants need to provide professional guidance to their institutions to navigate through the storm.

COVID-19 took the world by complete surprise and the full impact of this pandemic on the world`s economy and businesses is still unknown. The disruptions in business activities have cash flow implications that can’t be underestimated and might have not been factored in cash flow projections for the year 2020 since there was no or least anticipation of its wide spread across the globe.

Ghanaian businesses that are particularly vulnerable are those currently struggling for profitability and with unstable cash flows or low cash reserves. Even businesses that appear to be in good financial shape but falls under tourism, hospitality, entertainment and air transportation have been adversely affected as demand for such services comes to a halt as a result of directives to temporary lockdown the country and to practice social distancing to stem its spread which is important to public health as human life comes first.

It is recommended that; as an Accountant you review and adjust the company’s 2020 cash flow forecasts to determine what impact COVID-19 has on the company’s income generating ability from its investments and the ability to pay their suppliers and debt. The Accountant should play a lead role in the business to think outside the box to deliver goods or services in best alternative manner so as to keep the business going – such as by home delivery or online, and control the variable costs. The Accountant should consider leading the organization to cut travelling and marketing cost, imposing non-essential meeting restrictions and granting leave without pay to preserve cash etc.

The Accountant should also critically examine the cash flow to determine the liquidity position of business and advice accordingly, if it is prudent before making any donations as part of the company’s cooperate social responsibility aimed at supporting the government’s effort to mitigate the effect of COVID-19. For example, the Ghana National Health Insurance Authority donated GH₵250,000 towards the Ghana government’s COVID-19 Trust Fund despite its high indebtedness to health service providers across the country.

According to a publication by Jonas Nyabor on 23rd April 2020, the President of the Private Health Facilities Association of Ghana, Samuel Boakye Donkor speaking to Citi News said currently the National Health Insurance Authority owes members of the association between 6 to 14 months arrears in claims. The Private Health Facilities Association of Ghana has described it as troubling.

This gesture has left the service providers very dissatisfied and could lead them to mount pressure on National Health Insurance Authority for debt settlement or even turn away patients under the scheme.

If any organization should run into financial crisis it may consider cutting down on workforce which should be the last resort option. This should not happen as a result of a donation which could have been avoided to save the organization from financial crisis.

The future is not certain as far as COVID-19 is concern and it is demanded on the part of the Accountant to revisit any capital investment plans scheduled for the year. Before making any capital investment at this crucial time, the current liquidity position of the business should be of paramount concern and also consider the payback period of the capital investment before embarking on any capital expenses.

Payback period is the time in which the initial outlay of an investment is expected to be recovered through the cash inflows generated by the investment. Payback period is an indicator of risk inherent in a project because it takes initial inflows into account and ignores the cash flows after the point at which the initial investment is recovered. Other investment appraisals can be employed to determine what capital investments are worth investing into in order not to create any financial crisis for the business.


The Accountant can also lead the business to improve its debt collection position and negotiate more favorable terms in loan and creditors’ payment. The company’s cash flow can be adversely affected when customers lag in payment. During periods like this businesses should offer incentives for paying instantly or for paying early. The Accountant should advocate for the business to get people to pay right away or early by offering a small discount or other incentives, bearing in mind that any costs associated with this incentive is relatively cheaper than chasing customers for delay payments. The Accountant should as well lead the team to negotiate better payment terms with creditors and lenders as strategy of delaying payments but should be skilfully done not to affect the credit worthiness of the business.

The Accountant should also think of taking the business through diversification if possible. Diversification occurs when a business develops a new product or expands into a new market. Businesses often diversify to manage risk by minimizing potential harm to the business during economic downturns. Scan the current environment to identify opportunities where idle funds can be channeled to generate other sources of revenue for the business.  Currently, COVID-19 crisis has also created high demand for PPE’s such as nose masks, hand sanitizers, gloves, etc. Can the business take advantage in the manufacture or distribution of these products? Is there any other spotted opportunity that the company can take advantage of with its idle funds or existing plant to generate immediate source of revenue?

The Government of Ghana for example has provided certain packages to sustain businesses, the Accountant should assess the reliefs offered if the business can take advantage of it by applying for a soft loan if qualified. For instance, the Government of Ghana is giving out GH₵600 million to micro, small and medium scale enterprises as “soft loans scheme”.

The Accountant should as well help the business to build financial reserves. Most businesses are almost done with 2019 Audited Financial Statements and are yet to decide on dividend payments. It becomes financially prudent as an Accountant to advice to suspend the declaration and payment of dividends or distribution of any reserves to shareholders if the business is likely to face any liquidity crisis.

Suspension of dividend payments places a strong moral obligation on businesses to make themselves as secure as possible through this crisis. If the business also decides the time is right to open a new location, expand its product line or reach out to a new market segment, it may dip into its retained earnings to fund the growth. In this case, dividends may be suspended temporarily to facilitate increased earnings which may also not be a welcoming news to all shareholders. Shareholders should be ready for better or (for) worse when it comes to dividend payment in times like this.

“We know how to bring the economy back to life. What we do not know is how to bring people back to life,” Ghana President Akufo-Addo, concisely emphasize the devastating effects of Coronavirus and the need for all to join hands to stop its spread. Make safety your responsibility by adhering to good health and safety practices and compliance with applicable health and safety regulations at the workplace.


The writer is a Chartered Accountant

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