How Businesses Can Use Accounting to Address Critical Challenges During the Pandemic and Beyond
Business owners and corporate leaders always need to be agile in responding to rapid changes in the marketplace and business landscape, but that ability has been perhaps more important than ever since the start of the pandemic. Dr. Patrick Kelly, associate professor of Accounting at Providence College, has particularly valuable insights on how business owners and managers can use key accounting principles and skills to remain prepared for unexpected challenges in the marketplace, and to be agile in responding to them when they occur. Watch and read more below for his top tips and insights.
Dr. Kelly has been teaching undergraduate and graduate Accounting at Providence College for the last 20 years, and also serves as director of the Ethics in Business Education Program at the PC School of Business. This fall he’ll be teaching Accounting as part of the PC School of Continuing Education’s 8-week Micro MBA program, an online program that meets once per week beginning on September 22nd and is open to anyone looking to improve or update their business management skills in a short period of time.
Dr. Kelly says that the ability to evaluate the impacts of those outside forces on business performance, and to make informed, strategic decisions about how to respond in order to ensure continued success can often be the factor that makes or breaks a business:
From my experience and research in the field, I can tell you that the skills that allow for agile business management come largely from the world of accounting – so it’s a really critical area of knowledge for business owners and leaders to understand.
The pandemic has really shined a light on the importance of accounting in making strategic business decisions. We’ve seen this at work quite a bit over the last year and a half, as the pandemic unfolded and caused businesses to have to respond and pivot in record time. Almost every day in the Wall Street Journal there’s an article about how organizations are reacting to the pandemic and getting through it. Whether you’re a small or large organization, everyone has had to deal with its effects, and underlying all of it is accounting information.
Those who had a good understanding of their business’s financial position, the way they operate, the ability to access cash and change strategy – those are the ones that turned out to be more successful. The pandemic and the mass shut-downs it caused is probably a once-in-a-century event, but we’re not through it yet and there are a whole host of other events that can impact business in a similar way in the future, even if not quite on the same scale.
Unfortunately, we’re still not completely out of the woods with the pandemic, and there will always be unexpected things that happen that require businesses to respond and adjust. So here are a few key things that business owners and managers should always have a good focus on, so that they’ll be able to react quickly and strategically:
- What does your supply chain look like? How reliable is it now and how might that change as we come out of the pandemic, or if the new COVID variant causes us to go back into shutdown? How nimble are you in getting your goods and services to your customers?
- What is your cash position? Some organizations needed access to cash to withstand the pandemic when sales were delayed. Do you have that in reserve? If not, what is your plan to be able to access cash if you need it?
- How do you deal with your workforce as demand ramps up, or if a pandemic resurgence requires you to ramp back down again? The government has helped a lot of organizations through the CARES Act and assistance through programs like forgivable PPP loans to try to keep people employed and reimburse the organizations who keep them employed. Do you know how to access those programs when they become available? And do you know the logistics of how best to leverage those programs and the financial impact it will have on your business over the long term?
As I mentioned before, along with the financial considerations of these questions there are ethical considerations as well.
If an organization makes financial decisions based solely on the bottom line that don’t also take into account how to deal fairly with customers, employees and the community, chances are they’ll feel the effects of that in a negative way and end up suffering down the road. We’ve seen that even during something as severe as the pandemic. The way that organizations behaved and the different ethical decisions that were made also factored into whether they were successful or not.
I’ll be providing a more detailed and in-depth understanding of these concepts during the Accounting session of the PC Micro MBA program. We’ll be covering key concepts like financial accounting and understanding financial statements, as well as managerial accounting and concepts like budgeting, planning and strategic decision making.
We’ll also talk through some case studies of how utilizing these skills effectively has helped businesses come through the pandemic, and how any business owner or manager can put them to work to keep their own business agile and healthy despite unexpected changes in the marketplace. It’ll be an excellent opportunity to get a strong foundational grasp on these critical concepts in a short amount of time.
Related Resources
PC Micro MBA Program
Certificate in Accounting
All Degree, Certificate and Professional Development Programs at PC School of Continuing Education
