Actium Consulting offers helpful client advisory services during COVID-19

Anna Abbruzzese – Owner – Actium Consulting Inc, talks to Sage Advice about how her business’s focus shifted with the needs of her clients during the COVID-19 crisis.

Like many accountancy and bookkeeping professionals, Anna Abbruzzese was preparing her consultancy and bookkeeping clients for tax season when suddenly the COVID crisis was upon Canada. Almost instantly, Anna and her staff found themselves taking on a new level of COVID-19 specific advisory –helping her clients decipher the almost daily information concerning relief and support for businesses.

Like a tidal wave out of nowhere

Although Anna and Actium were able to successfully shift focus and support businesses with COVID-19 related matters, the crisis crashed in like ‘a tidal wave out of nowhere’ in March, catching her and her clients by surprise – a scenario encountered by thousands of Canadian businesses.

“We were going along as normal through February and we of course knew of COVID-19 in the worldwide news, but nobody ever thought it would be what it is now…and then all of a sudden they announced the lockdowns and it affected so many of our clients who were forced to shut down such as retail stores, hair salons and   other personal services ” explains Anna.

From this moment Anna found herself addressing the concerns of the clients in the most heavily affected sectors: restaurants and retail, some of whom may have had difficulties during prior economic downturns. The difference with COVID-19, is that businesses who were ‘crash proof’ were suddenly in the same position, seeking help.

“We support all sorts of businesses – small businesses, medium-sized businesses and many who have never been in a position like this – for example dentists and oral surgeons who suddenly lost the ability to earn income. They didn’t know what to do and came to us saying ‘I’ve never laid off a person before…how do you do that?’”

Interpreting a sea of information for clients

One of the main responsibilities that Anna and Actium took on was making sense of the almost daily changes to the support being offered to businesses from the Canadian government. One thing that Anna was able to do almost instantly was to be proactive about reading the legislation that would guide the advice she would offer customers to protect their interests and reduce liability for her practice.

From this activity came an ongoing series of emails that were distributed to clients on both her consulting and bookkeeping sides of the business.

This way of interpreting, distilling, and distributing information was appreciated by her clients, who responded with positive feedback and communications for the consistent help during the crisis.

“I tried to be really proactive. I have a thirst for knowledge and I like to dig into details so I would read up on the legislation in the new Bills, then I would send emails  just trying to break down the information into layman’s terms. The message would be ‘this is what we know today’. Sometimes I had as many as three emails going out in a week, due of the level of government updates coming in, and then sometimes there wouldn’t be another email for seven or eight days as it depended on the information coming out from the government. I would sit down at night and summarize what we knew regarding things like, the CERB, the new personal and business benefits and the various wage subsidies.”

 

Protecting the practice while offering advisory in uncertain times

Actium has not charged for COVID-19 advisory matters, this is in part because they are in a financial position to eat this cost currently. Also, they are invested in their client relationships and want them to have as few boundaries as possible to bounce back.

Although these COVID-19 services are being offered freely, it does not take away the importance of protecting both the interests of the practice and the client during this unprecedented and constantly changing business environment. Therefore Anna and Actium ensure that they are considering all advice from compliance and legal aspects.

One way that they are able to help their clients but avoid massive liability is to do the groundwork on filing and ask the client to review the work, but ultimately leave the final push of the button to clients.

Anna says, “We don’t do any CRA Covid-19 benefit filing on their behalf…that’s just too much liability… the penalties are very punitive. We also want clients to understand what they are applying for. So, we’re giving them extensive workbooks with detailed calculations and stating ‘Please review the financials, payroll and the calculations we’ve done, and then submit it through CRA’.”

As Anna learned, one way to reduce the number of incoming requests for help that may be repetitive or address the same concerns is to become proactive. For example, when the government makes an announcement, she will get a communication ready that will address the most likely FAQ’s that will be coming from existing clients and businesses desperately seeking help. Over time this almost becomes a matter of predictability. This brings order to the chaos.

“There’s a bit of a joke in our industry that we get nervous every time Trudeau steps up to the podium as it seems he creates more work for us…Even today and the extended timeline for the wage subsidy (CEWS). I suspected it was going to run until September as I read that was an option in Bill C-14.  They put in a clause so that they could extend until September and they would not have to go back to Parliament and re-legislate the benefit. However, they may now change the eligibility criteria and so again we wait for clarification.” says Anna.

Urging caution and compliance during COVID-19

After the dust has settled there will undoubtedly be a period of correction and auditing to make sure that those who applied for government assistance were eligible in the first place. Because of this it is more important than ever that accountants or bookkeepers offer advice that will keep their clients compliant. In some matters of financial assistance things will likely change. For example, with the $40,000 business loan (CEBA), a balance has to be struck between making repayments and having enough funds for the business to survive in the present.

“I sent out an email a couple of days ago with some updates on what we know about the $40,000 loan, and some assumptions we’ve made on it. We are concerned about the repayment terms and the forgiveness of it. Which is why I sent the email out saying ‘don’t repay any of it right now’, because it is not clear what amount is going to be forgiven and if you will have further access to those funds” says Anna.

‘Cash is king’- a lesson learned

For businesses that can reopen in 2020, one of the expected learnings is the importance of reserve cash or cash on hand that can be deployed during unexpected crises. This will be a concept embedded even more into client advisory briefings from accountants and bookkeepers.

“I think it will be around cash flow and savings. A lot of people don’t have any savings and that was a huge eye opener…that’s the number one killer of any business, right? We have spent the last two months preparing numerous cash flow forecasts for clients to help manage their business, review scenarios, and avoid bankruptcy. That would be my top advice. Thinking about the cash that is available should revenue drop, and not just cash covering immediate overheads and wages,” says Anna.

The hot topic for July will no doubt be ‘reopening’ and businesses will need more hand holding than before to restore or pivot their business operations. Client advisory services will be highly sought after from accountants, bookkeepers, and consultants.

This interview took place on May 15^th 2020.