To help members navigate the emerging challenges of today’s business climate, IMA® (Institute of Management Accountants) recently launched “IMA Briefing,” a new thought leadership series from IMA's senior executives. IMA Briefing offers commentary on current events and how they are impacting the finance and accounting profession. The series will be featured on the IMA website, with new content added in response to breaking news developments.

The first Briefing, titled “Financial Planning for Reopening Amid Pandemic” and authored by Raef Lawson, Ph.D., CMA, CPA, CFP, CFA, IMA vice president of research and professor-in-residence, focuses on the COVID-19 pandemic and how businesses – particularly small businesses – can safely reopen.

Lawson argues that recovery from COVID-19 will not be uniform, with some countries tentatively opening while others experiencing rising rates of infection that are stalling or reversing reopening efforts. He observes, “Disparate reopening plans are going to continue to hurt small businesses, as they are particularly vulnerable to the economic impact of the coronavirus due to a lack of financial resources as compared to larger companies. With fewer resources available, many small businesses likely have not developed comprehensive response and recovery plans yet.” Lawson recommends a resource prepared by IMA’s Small Business Committee, which outlines a three-step plan to guide small businesses through the recovery process, aiming to ensure business continuity in a time of crisis.

Lawson also draws from the results of a joint IMA and the Shanghai National Accounting Institute (SNAI) survey of finance professionals in China, which found that poor cash flow was one of the top challenges facing enterprises as they conducted business amid the pandemic. In addition, it revealed that a lack of risk prevention awareness and risk management mechanisms had left small enterprises unprepared to develop effective crisis recovery plans.

The Briefing concludes by asking small businesses to plan for two possible scenarios: first, there is no significant second wave of virus infections that causes renewed lockdown measures and an inevitable return to recession. Or second, that an increasing number of infections in Europe, South America, and many U.S. states gives rise to a second wave of the pandemic, leading to renewed lockdowns in a significant proportion of the world.

Concludes Lawson, “As small businesses confront the uncertainty surrounding reopening plans across world, it is imperative they develop a stable, organized process for moving forward – a framework that enables them to assess, build, and communicate toward a successful future.”