The impact of the coronavirus pandemic on the state’s accounting firms is heavily on the minds of those in the sector and their clients.
More than 65% of the 305 CPAs surveyed by the New Jersey Society of Certified Public Accountants said a timeline for businesses to reopen will help small businesses compared to other relief efforts. Deferring tax payments or extending deadlines was ranked second by 47%.
CPAs said 34% of their business clients will have a hard time, but are expected to recover to-pre crisis levels in over 12 months once stay-at-home restrictions are lifted, with 12% expected to go out of business.
For the remainder of 2020, participants said 24% of businesses are worried about the survival of their firm and 35% will have a rough time, but are expected to survive. Another 24% will scale down their growth expectations, 13% will not see any material impact on their business and 4% expect not to grow.
Most accounting firms are anticipating lost revenue during the pandemic, with 67% indicating they expect revenue to decrease by at least 1-25%. Fifteen percent said their firms will lose more than 25% of revenue, and 18% indicated not sure or no loss.
“This survey shows that business owners need a comprehensive and specific plan for reopening the state, a clear statewide strategy that’s coordinated with medical experts and New Jersey’s business community. The state’s businesses are counting on the administration, the Restart and Recovery Commission and the Restart and Advisory Council to deliver an effective plan of action. We offer our assistance in meeting the multitude of challenges ahead,” Ralph Albert Thomas, CEO and executive director at the NJCPA, said.
In terms of staffing changes due to COVID-19, 50% of firms said they haven’t changed anything, 19% have laid off full-time employees, 14% are hiring fewer temporary staff, and 7% are planning to lay off full-time employees. Only 10% were unsure.
For businesses that have had a decrease in revenue or employment levels, 27% of survey participants said their clients will recover within 6 months, 24% said in 6-12 months, 29% said in more than a year and 10% will go out of business.