The Covid-19 pandemic has taken a heavy toll on the Caribbean, which is famed for its vibrant tourism industry. In October 2020, the International Monetary Fund said that while Caribbean countries had been relatively successful at containing the virus spread, ‘the sudden stop in tourist arrivals and local lockdowns was equivalent to a cardiac arrest to their economies’.
As small and medium-sized practitioners, ACCA members have been supporting their clients through this turbulent period while trying to uphold their own businesses. At a roundtable held last December, we asked five practitioners about their firms’ top challenges for 2021, as well as the main issues facing their clients. Their thought-provoking observations are summarised below.
What are your firm’s major challenges in 2021?
Vintoria Bernard FCCA, managing partner, VB Chartered Accountants, Jamaica: I foresee three main challenges. The first is liquidity due to small businesses being severely impacted by the lockdown. Where businesses have been shuttered, owing outstanding amounts to their accountants, that money will have to be written off as bad debt.
My second challenge is retaining and managing talent. Over the years, I have invested significantly in training my staff. But some of them have moved on after being furloughed during the lockdown and not receiving full salaries.
My third challenge is service delivery. Given the pressure on cashflow and talent, how am I going to deliver a high-quality service with limited resources?
Ruthven Thompson FCCA, partner, HLB Montgomery & Co, Trinidad and Tobago: We are looking at restructuring our fees and rethinking how we provide a service to our clients. We want to make ourselves a little leaner and a little more efficient.
Ultimately, the big challenge is ensuring that we are in a space where we can coexist with the client and work with them to make sure that they can continue to survive.
The challenges provide an opportunity for us to offer additional services in terms of consultancy and helping our clients. They also present our clients with an opportunity to do things differently from before, which might mean they are even more profitable.
Stacy-Ann Golding FCCA, founder, SN Golding Financial Services, Trinidad and Tobago: I established my own audit and accounting firm in February 2020, so I face challenges around growth – getting our name out there and making people aware that we are available to serve, and using technology to the best of our ability.
It is also imperative to ensure that we implement the ISQC 1 standard on quality control as we grow so that we meet the standards required of us.
‘The challenges present our clients with an opportunity to do things differently from before, which might mean they are even more profitable’
Ramesh Seebarran FCCA, managing partner, HLB R Seebarran & Co, Guyana: One of the things we are pursuing is technology. We recognise that we don’t have the appropriate technology for the current and evolving environment. Going forward, we need to enhance our technology to complement doing manual work, which will continue for a while.
Another issue is that Guyana is now an oil-producing country; this new development has brought a lot of foreigners to the country, most of whom are experts working in this sector. We recognise they bring with them skills and expertise not available locally, but they also bring different cultures and ways of doing things. We must now adapt to these changes and learn how to work with clients from a different background within the framework that governs us.
Damien Skeete FCCA, partner, Skeete, Best & Co, Barbados: The number-one challenge for my firm is to attract new business. Since Covid has crunched revenues, some companies will no longer be statutorily required to have an audit. Then there are others that were under the threshold previously but still had an audit as good business practice. They may no longer see an audit as a priority.
A further challenge that should not be overlooked is the ethical pressures that may present themselves to practitioners in this climate. We have a great relationship with our clients and are almost seen as a trusted friend. But we have to maintain our independence as per the conceptual framework.
‘The challenges present our clients with an opportunity to do things differently from before, which might mean they are even more profitable’
What are the main issues facing your clients?
VB: The minefield of uncertainty is a major challenge for my clients right now. They are unable to visualise what tomorrow will bring.
Another challenge is operational efficiency. With homeworking, they have no oversight of what work their staff are doing.
Then there is the matter of access to low-cost capital. Yes, they can get bank overdrafts and revolving loans, but these are two of the most expensive ways of financing a business – which doesn’t serve them when they are already cash-strapped.
RT: In Trinidad, we do a lot of importing, both for sustenance and more general reasons so access to foreign exchange to make those purchases is one of the biggest challenges facing our clients. The issue existed before, but Covid has exacerbated it.
If our clients can’t get the sales they require to generate proper cashflows, that translates into whether or not we get paid. Accounting and auditing services tend to be a lower priority than paying for staff or a building.
SG: A big issue for clients is credit management. Board members and senior management are involved with collections now because it is becoming so important.
Another issue is the ability to pivot – which has become very, very necessary. Clients who are able to move with the times have some interesting opportunities despite the challenging circumstances.
RS: At the beginning of the pandemic, banks offered to defer payments on loans but many clients didn’t realise that interest still accrued. This is putting a serious dent in their ability to recover from Covid and some have closed their businesses.
On a positive note, the government has announced some initiatives that will bring some relief to businesses.
DS: We work with many small and medium-sized clients, which have staff working from home, often using their own devices. As a result, these businesses face challenges around cybersecurity, specifically phishing, data protection and privacy laws and fraud.
Also, given the disruption being experienced, having to adjust operations and staying ahead of staffing needs, they are also finding it hard to be forward-looking when it comes to their financial planning, scenario planning and business continuity. But we are cautioned of the fact that change and disruption is only going to come at us faster as we move further into the future, so it’s essential to plan ahead.
What’s also unfortunate is that I get the sense that it’s a struggle for some of these business owners to remain motivated by their initial passions and vision because they have in some instances been given a crippling blow.
What next?
While the past few months have been a difficult period for the Caribbean, the roll-out of vaccines should help to drive the region’s recovery during 2021.
As our roundtable highlights, accountants can play an important role in the Caribbean’s economic recovery by supporting their clients, adopting cutting-edge technological tools and seizing new opportunities to grow their businesses.