By Rayanne Buchianico, ABC Solutions, LLC
As the global pandemic brings business and the economy to a grinding halt, you may wonder what steps you can take now to protect your business, your employees, and your customers. CISA.gov lists the Information Technology Sector as one of 16 critical infrastructure sectors needed to stay open and operable during a national crisis. Here are some steps you can take right now to alleviate stress on your business.
The IRS outlined provisions for the Families First Coronavirus Response Act (FFCRA). The new law will take effect on April 2, 2020, and remain in effect until December 31, 2020. Here is a quick rundown of the provisions. Consider finding a way in your PSA or payroll system to track COVID-19 related leave separate from normal PTO.
- For COVID-19 reasons, employees receive up to a maximum of 80 hours paid leave
- Employers receive 100 percent reimbursement for the wages
- Employers face no payroll tax liability
- Self-Employed individuals receive an equivalent credit
- Employers with fewer than 50 employees are eligible for an exemption but can voluntarily comply. Employers with 50 – 500 employees are mandated to comply within 30 days. Employers with over 500 employees do not qualify for the credit.
Complete details can be found in IR-2020-57 at https://www.irs.gov/coronavirus. If your employees are forced out of work, please take advantage of this program to keep them paid.
The IRS has announced the April 15 tax filing date has been moved to July 15, 2020. If your return has been filed and you wish to cancel your automated payment, you can call the IRS e-file Payment Services at 1-888-353-4537. This is an automated service available 24 hours a day, 7 days a week. This relief also includes estimated tax payments for 2020 that are due on April 15. Take advantage of this extra time to save for the tax balance due. Contribute to a SEP or IRA, since those deadlines are extended, too.
For information on your state income tax response, please see this link: https://www.taxadmin.org/state-tax-agencies.
Dust off your crystal ball and peer into the future for this one. There are two possible outcomes that will invoke Economics 101 – Supply and Demand. Hardware and computer supplies may become limited and pricing could return to that of a 1991 personal computer. Therefore, it may be tempting to stock up on computers now when the price is low. However, if the economy continues to sink, you could be left holding those computers with no one to sell them to. It may be a waste of valuable company resources.
Reduce stock and inventory purchases to keep on hand. You may need that cash in the coming weeks. Consider keeping only one or two computers on hand for a quick turnaround. Otherwise, only order equipment that your customers have ordered and paid for.
If you are not already doing this, immediately implement a policy in your company to collect on all hardware invoices before ordering. Now is not the time to extend credit needlessly. You will only harm yourself by charging the purchase to a credit card and paying interest on those charges if your customer slow-pays the invoice. If they want to slow-pay the invoice, they can slow-wait for the hardware.
The End Of AYCE Managed Services
For those working around the clock to get your customers’ employees set up to work remotely from home, this is for you. You may have an all-you-can-eat managed service agreement that covers everything, and you may struggle with whether you should charge your customers for this extra work that no one saw coming.
The answer is, “Yes! Absolutely charge them.” These are new installations, new connections, and far outside the normal course of your managed services agreement. To be expected to connect 100 remote workers in 48 hours for free is unreasonable.
Explain to your customers how securing remote connections and the home offices of their employees is time-consuming and you want to devote all the resources possible to getting it right. This cannot be done for free. Offer to spread the cost over future months if it will help the customer but remind them that you are still required to pay your people overtime for working to keep them safe and operational.
We already knew that the all-you-can-eat concept is going out of style. This pandemic may pave the way for AYCE to go the way of the leisure suit.
Check Your Subscriptions
You should do this regularly anyway. Review the subscriptions you purchase and make sure you have a customer being invoiced for it. Often, we switch subscriptions like AV or security and fail to cancel the old vendor when the new one is implemented. Check each vendor to ensure you have a legitimate reason for sending them money each month. Are the bills accurate? Do you have any services you can consolidate for a lower monthly cost?
Stay Connected With Your Financials
With so many other things needing our attention, it is easy to let your accounting system go. Don’t do it. If there is a problem with profits, you want to know that now, not later. Stay on top of the accounting reports, financial metrics, and any slump in revenue. Any changes should be scrutinized and corrected as quickly as possible.
About The Author
Rayanne Buchianico owns and operates ABC Solutions, LLC, an accounting, tax, and business systems consulting firm serving all industries and specializing in IT firms throughout the United States. She is also a partner in Sell My MSP, a listing service connecting interested buyers with motivated sellers of IT firms. Rayanne is passionate about nurturing the transformation in owners of small businesses who become more comfortable and savvier with the financial aspects of their business.