The Impact of the Coronavirus Pandemic on New Jersey Accounting Firms and Their Business Clients

 – May 12, 2020
The Impact of the Coronavirus Pandemic on New Jersey Accounting Firms and Their Business Clients

More than 300 certified public accountants (CPAs) participated in a survey in May 2020 about the impact of the coronavirus on their own firms and their clients’ businesses.

Impact on Accounting Firms

Summary

  • 82% of respondents expect their firm’s revenue to decrease because of the pandemic, with 15% saying their revenue will decrease by more than 25%.
  • Half of the firms have maintained staffing levels, while 26% have laid off or plan to pay off employees.
  • 55% of respondents expect it to take six months or longer for their firms to return to pre-crisis revenue and employment levels once stay-at-home restrictions begin to be lifted.

Survey questions and results

Do you expect your firm’s revenue to decrease because of the pandemic?

No 10%
Yes, by 1-10% 27%
Yes, by 11-25% 40%
Yes, by more than 25% 15%
Not sure 8%

Has your firm changed its staffing because of the pandemic?

No 50%
Hiring fewer temporary staff 14%
Laid off full-time employees 19%
Planning to lay off full-time employees 7%
Not sure 10%

How quickly do you think your firm will recover to pre-crisis revenue and employment levels once the stay-at-home restrictions begin to be lifted?

Within three months 8%
Three to six months 14%
Six to 12 months 32%
More than 12 months 23%
Not sure 11%
We have not experienced any significant decrease in revenue or employment levels 12%

Impact on New Jersey Businesses

Summary

  • CPAs say that 27% of their clients are worried that their businesses will not survive the crisis, while 39% will have a rough time but expect to survive.
  • CPAs expect it to take 34% of their business clients more than 12 months to recover to pre-crisis levels.
  • CPAs predict that 12% of their business clients will not recover from the crisis and will go out of business.
  • The top concern of New Jersey businesses is cash flow. Other significant concerns include the ability to meet payroll and getting customers back.
  • The number-one thing New Jersey can do to help small businesses is to provide a timeline to allow businesses to reopen.

Survey questions and results

For the rest of 2020, indicate the percentage of your business clients that meet each of the following:

  • 24% of businesses are worried about their survival
  • 35% of businesses will have a rough time, but expect to survive
  • 24% of businesses will scale down their growth expectations
  • 13% of businesses will not see any material impact on their business
  • 4% of businesses expect to grow their business

For your business clients that have had a decrease in revenue and/or employment levels, on average how quickly do you think they will recover to pre-crisis levels once the stay-at-home restrictions begin to be lifted?

  • 27% of clients will recover within 6 months
  • 34% of clients will recover in 6-12 months
  • 29% of clients will recover in more than 12 months
  • 10% of clients will not recover (will go out of business)

Overall, what are your business clients’ top three concerns:
[NOTE: Total exceeds 100%; respondents could select up to three items.]

Cash flow 77%
Meeting payroll 46%
Getting customers back 43%
Operating costs 37%
PPP loan forgiveness 30%
Protecting employee and customer health 26%
Getting employees to return to work 21%

What are the top three ways New Jersey can help small businesses right now?
[NOTE: Total exceeds 100%; respondents could select up to three items.]

Provide a timeline to allow businesses to reopen 66%
Defer tax payments or extend deadlines 48%
Other tax provisions (e.g., modifications to net operating loss limits, temporary amnesty if taxes are overdue) 37%
Provide the New Jersey Economic Development Authority with more funds so it can provide more loans and incentives 32%
Suspend new regulations and relax current regulations 29%
Cut down on government red tape 29%
Require rent payment grace period 14%
Reduce government fees 10%