Tax & Accounting Professionals Rush to Rescue Economic Casualties of Coronavirus
Many people think that accountants are just rational, unfeeling counting machines that operate completely on logic and reason. While on the surface that may appear to be true, I know from my discussions with many accountants that underlying that cool exterior is an actual human being with feelings. But what I love most is that accountants often care more about others than themselves.
The impact of COVID-19 on many of our lives will be told for years or decades to come. Through social media, I saw a lot of accountants (because I’m friends with so many of them) express concern for their clients and communities as well. I saw accountants trying to combat hysteria, sharing information about what Congress was doing and the implications to taxpayers, and also working creatively with small business clients to figure out how to make it through the crisis. Yes, many accountants looked beyond themselves and beyond their firms (which were also at risk) to help others who were in emergency situations and needed help navigating this confusing and complex crisis.
Accounting Perspectives on the Unfolding Crisis
Gabrielle (“Gabby”) Luoma, CPA, CGMA, and CEO of accounting firm MOD Ventures, LLC in Tuscon, Ariz., described how the year started out and how she saw the COVID-19 crisis unfold:
This year began like any other year...a little more organized from last year but in general we expected it to be a record-breaking year. The "we" that I mention here, our firm and our clients. We are partners in business, and I love feeling like together, we are a part of a much bigger plan. All of us were planning for the best year in business yet only to be completely blindsided by COVID-19.
At first, it wasn't real to me, not until our governor issued an essential service list and businesses started closing. Phone calls, emails, social media posts just keep coming and we were heartbroken by this massive tidal wave of loss.
I have gone through the stages of grief. The disbelief and anger rotates back and forth. I catch my breath and come to the surface and find gratitude. Grateful for our lives, our ability to rise again, and the determination to be a hero in our most vulnerable of times. As a CPA, and as a business owner, I grieve for a struggle that couldn't be planned for, that surprised us, and will affect all our livelihoods. I have worked with my clients, my friends and community for 15 years and I hurt when they hurt. This crisis is like the deep pain of losing something you love so much. It’s devastating.
In March after several states and multiple major cities had called for non-essential business shutdowns and asked residents to shelter in place to stem the spread of the virus, Tim Jipping, CPA, CGMA and owner of Journey Advisors & CPAs in Chicago, Ill., shared the following post on Facebook. For background, on numerous previous Facebook posts, both Tim and I had been calling for a calming of the hysteria and panic that was occurring:
My recently expressed concerns of the sweeping response to this terrible virus are unproductive. The last thing I want is loss of life. And maybe the second-to-last thing I want is to be unproductive during a terrifying time for so many.
I also realized my driving concern is the EXACT SAME as everyone else's — fear of catastrophic loss, of all kinds. As a combination of natural optimist and natural skeptic, I felt the need to say wait, wait, wait...what's really going on here? With each day in such a short span, massive decisions were being made that will impact every single one of us, and my gut reaction was they were myopic. However, practicing what I preach, after having some time to think about recent days, my conclusion is that it doesn't matter what I think, it matters what I do. These leaders have had to made some of the toughest decisions imaginable — discourse and debate are good, but resistance is not. Disagree, but commit, as they say.
And on a very personal (and selfish) note, part of my response goes to what I've been putting my blood, sweat and tears into over the past two years. I had been having the time of my life building a progressive, caring and innovative business, and admittedly I could see the impending backslide and was so crushed. I hate this virus — what it's doing to us physically and mentally. But again, after the initial reaction and self-pity, I realize it's not about a virus, or a business, or an economy, or a society, or (most of all) me. This challenge is all about faith and resiliency.
We're all having to make sacrifices right now, and I trust all of our hearts break for those already feeling the impact so deeply. My aim is to do everything in my ability to help get through and recover from this, and I know so is my wife and all of the great medical professionals out there.
I believe many accountants are like Gabby, Tim, and I — we care a lot about our family, friends, clients, and community. We’ve watched this crisis unfold and we’ve not just worried for our family, friends and firms, but also for the greater community of small businesses and nonprofits that will probably feel this crisis the most economically. According to the IRS, over 35 percent of businesses never reopen after a disaster and this is the first time in most of our lifetimes that we will experience a worldwide economic crisis, so we will probably see a much higher failure rate in the small business community.
In Times of Economic Crisis, Accountants Are Emergency Responders
Accountants aren’t your traditional emergency responder, but we have to help triage the business situation, help figure out the best way to stem any hemorrhaging of cash or investments, and stabilize the financial situation to ensure that people are able to survive and be ready to bounce back once the crisis passes.
As accountants, we all (both public practice and business and industry members of the profession) have to pull not just ourselves together but also the people we serve — whether client, internal client, business partners, family, friends, etc. — and help people make sense of this rapidly changing and complex crisis. We need to be their rock amid the chaos and help give them peace of mind — the same way a victim of a physical crisis is relieved once the police or fire department shows up.
We need to help them visualize a better future and have clarity around how they can make it through the crisis. We need to provide them hope that our governments (federal, state and local) and communities will do the right things, and that we all make it through this TOGETHER.
Accountants Must Combine Compassion & Logic To Provide Hope
Tom Hood, CPA, CITP, CGMA, and CEO of the Maryland Association of CPAs, replied to Tim’s earlier post with the following call to action for accountants (adapted for publication) to help everyone through the crisis:
This is a very scary time AND a time for courageous leadership. We are fighting two viruses — COVID-19 and the “fear virus” both spreading equally fast, exponentially in fact. I think you are wise to make “compassionate” business decisions and to creatively think about your business and your client's businesses in new ways.
Remember that people are Velcro for negativity and Teflon for positivity? Multiply that times ten (10x) and you get the “fear virus.” 24-hour news cycles, a divided nation, wild swings in the market, it is no wonder we are in a state of fear! And remember what fear does to our brains and bodies? We go into fight or flight mode (thus the anger feelings), which means we literally and physically cannot think creatively, proactively, and be the best version of ourselves.
Put your oxygen mask on first, so that you can help others — family, friends, clients, colleagues. I remember office hours with bestselling author, Jim Collins (“Built to Last,” “Good to Great”) and he talked about the importance of core values and purpose and how great companies double down on those in crisis. In other words, when everything in the world is changing and uncertain, what can you reassure your people and clients that will not change? That should be core values and in your case COMPASSION seems to be one of those. Use those as a base for your communications. I just saw a communication from Marriott that did that very thing.
My second thought, which I have now used through several major “black swan” events, also comes from Jim Collins. He calls it the Stockdale Paradox and it comes from Col. James Stockdale, who survived a horrific POW camp during the Vietnam War. Collins interviewed him in the book “Good to Great” and the concept is, “You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.”
See the paradox? Confront the brutal facts AND visualize and plan for the best. Use your strengths, your positivity resources. Do the same thing for your clients — help them plan for the worst, then flip those challenges into opportunities. What might that look like? How would we structure our business at 50 percent of revenue? What creative pathways can we imagine?
Right now, every business is facing the same market dynamics and situations in their competitive arenas, which means that those who can plan for the worst and seek new opportunities will be winners coming through the other side (which we all hope is sooner rather than later). We truly are all in the same boat.
Now here is the key for all us CPAs. It is a “hard trend” certainty that all of the mechanisms being suggested to get through this (other than medical) will involve accounting and taxes — the language of business that accountants are experts in. Whether it is forecasting revenue and cash flow (worst case AND best case), applying for loans or assistance from the SBA, or reductions in payroll taxes to help people, or the just-passed Family Leave Act that mandates leave and sick pay AND offers exemptions and refundable tax credits, these are all opportunities for CPAs to shine and truly add value during this crisis.
Finally, be the LIGHTHOUSE. Your expertise will be needed more than ever in this crisis. Much of the fear and emotions, beyond the real virus, are grounded in financial uncertainties. You and our fellow CPAs have the keys to help navigate these turbulent times and beat the FEAR VIRUS! CPAs are truly needed to help us come through this even stronger.
Tom’s response gave me goosebumps (the good kind) and really inspired me to be the beacon of hope for my clients, friends and family. As accountants, we can’t do anything directly to combat the virus, but we can help ensure that everyone is able to survive the financial aftermath that is coming.
Accountants Are Key to a Speedy Recovery
We don’t know how long the health crisis will last, but with the CARES Act passed by Congress, we can at least start to plan to combat the economic crisis. Tom again provided some inspiration for how accountants should approach our role in dealing with the crisis:
Choose to be extraordinary! The one thing we can control is our mindset or attitude. This comes from our work with Dan Burrus and the Anticipatory Organization: Accounting and Finance Edition. He says to think about your current situation and ask yourself, what would an extraordinary CPA do in my situation? Take a minute to reflect on extraordinary people from history, or those you know and look up to. What was it about them that made them extraordinary? Now make a commitment to ask yourself every day or before that critical client meeting or presentation, “What would an extraordinary person do?” and do that!
Gabby also provided some perspective on the critical role accountants play on learning from and recovering from the crisis:
On the other side of that coin, we are resilient and we will help those struggling to come out stronger. We have to ask ourselves, “What did we learn?” How do we rise? The answer will be different for everyone but we as CPAs have the honor of participating in this process. We can keep the calm, the facts and bring tools to the table to help. I find myself saying over and over again these words, “We are essential," and now I believe it more than ever.
I believe this crisis is a call for all accountants to step up to our mission and help improve the world by helping our clients, communities, and constituents Take a deep breath and ground yourself. We will be needed to help get everyone — businesses, families and individuals — through the recovery to come.