Below we provide a number of action items your company should be taking to sustain resilience and navigate a viable path forward amid COVID-19 challenges and ever-changing conditions.
Immediate action items:
- Develop a COVID-19 prevention and response plan;
- Assess the immediate impact to your job sites;
- Sanitize the workspace often;
- Understand your insurance coverage;
- Stay current with all of the legislative changes;
- Review your collective bargain agreements (if applicable).
Action item #1: Cash flow
- Construction companies fail due to lack of cash flow;
- Utilize financial planning techniques such as project-centric budgets and forecast expected cash flows;
- Identify other sources of cash flow that will carry the company through any constrained periods;
- Seek relief on any current financial arrangements;
- Plan and execute.
Action item #2: Communicate
- Share your COVID-19 prevention plan with interested parties;
- Ask about the owners’ and other contractors’ prevention plan;
- Foster and encourage a two-way dialogue especially if anyone may have been exposed; Identify other sources of cash flow that will carry the company through any constrained periods;
- Develop and train all employees in scenarios;
- Talk to your accountant, bonding agent/surety, bank and other advisors.
Action item #3: Operations
- Review your contract terms and consult with legal;
- Understand your supply chain and make alternative arrangements;
- Insurance – know what is covered and what is not by your policy;
- Go remote where possible;
- Look for the opportunities.
Action item #4: Taxation
- The IRS has released Notice 2020-18, clarifying Treasury Secretary Mnuchin’s announcement that the Federal tax deadline delay:
- All 2019 income tax returns and tax due for individuals, trusts, estates, partnerships and corporations are now due July 15, 2020, interest and penalty-free;
- First-quarter 2020 estimated taxes are now also due and payable on July 15, 2020, but second-quarter estimates due June 15, 2020, are still due;
- The previous limitations of $1 million for individuals and $10 million for corporations no longer apply;
- Gift tax returns that are due on April 15, 2020, are not included in this relief for income tax filings and payments;
- States are formulating their own plan; stay tuned.
Action item #5: People
- Understand the changing legislation and what you and your employees’ rights are;
- Furlough and terminate/layoff of employees could have several components that need to be examined as DOL/legal obligations must still to be followed;
- For office and job sites, plan/consider infection control processes, such as increased cleaning of high-risk areas;
- Staff training on handwashing, respiratory hygiene, etc. for the office and job site;
- Set policies to address staff who may have been exposed and are in the incubation period, who are actually sick, and who may have family members who are sick.
Please contact your GBQ representative should you have questions, or if you’d like to discuss the above information in more detail.
We’re pleased to share content produced in collaboration with Grassi Advisors & Accountants.
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