Small businesses are always on the receiving end of economic uncertainties and live hand-to-mouth because they lack a long-term strategy for saving and building reserves for events like Corona-19. When Covid-19 swept the globe, many small businesses were forced to close due to cash flow issues. Economic downturns such as Covid-19 compelled businesses to critically examine their books to determine how to cut costs and increase profitability. To stay afloat, they must look beyond the breakeven point (no loss, no profit). Seeking advice from accounting firms in Dubai for corporate tax management can help them devise better strategies to deal with the pandemic’s difficulties.
Here are some accounting tips to help you overcome economic uncertainty and help your business become more profitable and successful.
CHANGE YOUR STRATEGY AND LONG-TERM OBJECTIVES
When unexpected economic uncertainty strikes your business, most entrepreneurs focus on short-term goals to put out the fires. However, it would help if you also kept long-term business continuity and profitability in mind. Accounting firms in Dubai can assist you in prioritizing your choices.
Analyze the profitability of each product and service your company provides. Pose some valid questions, such as “Is everything profitable?” ‘Are some products or customers more profitable than others?’ and so on. Allow your accounting team to conduct a thorough financial analysis and develop a new business strategy based on the findings.
EXAMINE EVERY CONTRACT
An economic crisis is a critical point in your business that necessitates contract reassessment. Gather your attorneys and top accounting firms in Dubai to review the contracts. Remember to pay special attention to force majeure clauses. You should scrutinize contracts for key elements such as termination rights, termination risks, renegotiation rights, personal guarantees, and other contract provisions. Finally, decide whether any of these terms need to be renegotiated.
INVEST IN CURRENT CUSTOMERS
A downturn in the economy, such as a pandemic or recession, is a better time to invest in new customers. When confronted with an economic crisis, your customers will likely reduce their spending. You make it more difficult to persuade new customers to try your products.
Economic downturns, however, are ideal for establishing genuine relationships with your existing customers. Demonstrate your concern for them when they are at their lowest. During a crisis, the relationship you build with your customers will lead to long-term customer loyalty. Furthermore, a downturn is an ideal time to reconnect with old clients. Old customers were once active customers, and contacting them during a crisis is critical.
CONCENTRATE ON CORE COMPETENCIES
You can steer your business in new directions and sectors when the sea calms. During such times, the greatest risks may yield the greatest rewards. However, diversifying into unknown paths during a recession or pandemic is not good. Instead, return to the products and services you are confident will perform the best.
It is not prudent to spend money to support inferior products or services during economic uncertainty. Invest only in your best products or services for past, current, and prospective customers. Additionally, look for multiple revenue streams to promote such products or services. Having multiple revenue streams will give you more financial flexibility when times are tough.
A pandemic is critical when businesses must rethink their accounting strategies to stay afloat. Unexpected events necessitate new strategies for which accountants can assist small businesses. Consider outsourcing accounting services if you cannot perform necessary accounting checks internally or your team needs qualified accountants. Seek the Assistance of the Top Accounting Firms in Dubai, UAE. Get the services of corporate tax management.
