If there's one thing that COVID-19 did do, is it highlighted the need to prepare for the unexpected. So what can finance professionals learn from the covid-19-pandemic?

As a result of the COVID-19 pandemic, the global economy went into deep recession, triggering the biggest economic crisis of the century¹.

SovereignBoss's financial experts have analysed the effects of the virus on the economy to find out what we should be doing differently.

Financial professionals can learn a lot from the COVID-19 pandemic.

For example, when it comes to retirement planning, they need to be thinking about how their clients are going to handle fluctuating interest rates and market volatility.

How Did the COVID-19 Pandemic Effect the Economy

The COVID-19 affected the economy by putting extreme financial strain on businesses.

According to the data from ONS², when compared to the pre-pandemic recording in Q4 2019, business closures increased by 37% in just 1 year.

It should be highlighted that even the best financial management may not have been enough to shield some firms from the pandemic's effects. Yet, for many, it was critical to their survival.

As the economy started to reopen, many people refocused their recovery efforts on quick development.

Finance experts' skills and experience were crucial in reviving trading, just as they were in ensuring enterprises' survival during the worst of the pandemic.

Looking ahead, we must analyse the lessons learned by financial management teams from the COVID-19³ problem and how they might be applied in future decision-making.

To do so, we must first determine the specific ways in which their position has become more important and scrutinized.

Financial Constraints

Financial constraints were vast during the pandemic and are still felt today to a certain degree.

The fast outbreak of the virus, as well as the speed with which much of society was engulfed in social distancing restrictions and national lockdowns, created an atmosphere of fear.

Because of the magnitude of the disruption to business, even short-term planning was impossible, and long-term strategy was a far-fetched possibility for most.

Financial decision-makers were forced to adapt to a variety of unique conditions in minute detail, including:

• Tighter regional lockdowns within national lockdowns⁴.
• The implementation of business and public financial support schemes that were regularly retooled in response to changing circumstances.
• Keeping in mind the larger picture of the national economic outlook and ongoing economic policy reviews.

Management teams had to deal with a slew of difficulties surrounding their operations, and supply was considerably affected.

Long delays and variable pricing systems hampered international shipment, making profit margins and connections with their conventional customer base increasingly insecure.

Returning to the Basics

Due to the emotional toll the pandemic took on society, many people went back to the basics, and when restrictions were lifted, there was a clear sense of hope.

But because of the damage to the economy that needs to be fixed, financial experts know that the effects of the epidemic will be felt for a long time to come.

The reopening of society and the revitalization of businesses provided many with the opportunity to make more risky decisions and seek out new growth prospects.

But the lessons learned in the previous years will naturally increase in value.

Common Questions

In Conclusion

It's important to be prepared for the future and have a plan of action in place, especially for unforeseen circumstances.

The COVID-19 pandemic taught us that no one can predict with 100% certainty what will happen tomorrow, let alone in the next few years.

Finance professionals have certainly had a lot to learn from the Covid-19 pandemic and are hopefully now equipped with plans and strategies for when the unthinkable happens.