Six months ago, who would have thought New Zealand would experience a record breaking growth in GDP in December? Chartered Accountant firm Money Metrics is encouraging businesses to be financially prepared to adapt quickly for dynamic times ahead.
"If there is one thing 2020 has taught us, it is to be ready for the unknown and prepare to adapt quickly. Combining this experience with the basic principles of ensuring your company is financially fit for the future will enable companies to take advantage of any opportunities that lie ahead." says Money Metrics Tauranga owner Cassandra Park.
The qualified Chartered Accountant has seen a noticeable change in the mindset of business owners. With many venturing into business for the first time, people are more aware of the need to access cash reserves on a rainy day.
"In the last ten months, clients that had strong working capital who were focused on reducing unnecessary costs, experienced less stress and more positive financial outcomes than others who didn't" says Park.
"When a company has working capital it means they are in a position to pay their current liabilities with current assets. It is a good sign of short-term financial health and during Covid it has meant those in a strong position have been able to look after staff, pivot their business model and in some cases even grow.
"Preparing a careful forecast, following a budget and being mindful of where their money goes will help business owners make intelligent decisions. They will have a better chance of responding to abrupt changes and have the ability capitalise on new opportunities".
She highlights that no one was able to accurately predict how 2020 would pan out and what eventuated was unexpected for many. "Aside from the government subsidy, the drive to support locals and an extraordinary domestic tourism market became a vital safety net for some clients and a great opportunity for others" she says. "It has given them time to adapt and refocus on what they need to do to prepare the future".
Park believes one of the biggest challenges yet to be fully understood is the transformation in human behaviour; how it will change consumer activity, how technology will continue to adapt and how businesses will need to respond. Fundamental lifestyle changes - the ways in which we work, interact, travel and shop, could be profound and long lasting.
Before the pandemic, the accounting industry was already undergoing a revolution. Transformation was rapid and some future analysts were debating whether digitalisation and automation would reduce the need for accountants. Cassandra Park believes that Covid has well and truly put that burning question to bed, as good relationships between companies and their accountants have become more important than ever.
"There aren't many industries that will yet have a complete picture of how their future is shaping up," says Park. "As chartered accountants we are just as exposed to the challenge. But while we can't predict the outcome we can put businesses in the best possible financial position to navigate it."
To learn more about partnering with Money Metrics to get yourself fiscally fit for 2021 visit www.moneymetrics.co.nz