Michael Costello, Managing Partner, recently featured in Business Plus, discusses BDO’s performance over the past year and the current issues facing Irish businesses.
In your view, has the government struck the right balance between public health and protecting enterprise and employment?
Striking the right balance between suppressing the spread of Covid-19 and protecting enterprise has been an ongoing issue throughout the world’s economies since the pandemic began. It’s an ever-changing balancing act that depends entirely on how prevalent the virus is at any one time. In this context, government has done a good job of implementing protective measures to sustain employment levels and providing temporary supports.
There won’t be a healthy economy without the suppression of the virus. Until a vaccine has been administered nationally, ongoing supports and schemes will be required to ensure the long-term sustainability of businesses.
From a trading perspective, has the pandemic been good or bad for your firm? Were you kept busy by clients seeking counsel on wage supports, tax warehousing, loan forbearance etc?
We work with clients across a broad range of industry sectors, some of which have been adversely impacted by Covid-19. We have also been working with companies to provide guidance on how to avail of government supports, and advising them on their immediate response and longer-term strategy. We have also seen an increase in activity in our customs and international trade services, largely in response to Brexit. We launched a new venture called Declaron, a customs clearance solution for Irish businesses, a partnership with Fexco.
How did your firm cope with the transition to remote working? How has it worked out, and in your view what are the shortcomings of this working model, both for staff and for managers?
Communication at all levels has played an important role since the pandemic began. The firm has rolled out and enhanced a range of collaboration tools such as Yammer, Float and MS Whiteboard to maintain a sense of connectivity with each other. We also virtually launched our new ReThink strategy back in October, which received a significant level of engagement and the implementation of which is well underway.
Government pandemic supports for business have been substantial. Do you think they go far enough and, given the ever-lengthening current lockdown, how fearful are you for the solvency of restrictions-impacted enterprises if supports are withdrawn?
The deployment of some loan supports needs to be examined, where the level of complexity for business has resulted in a lower than expected draw-down of those supports. We also need to ensure that those businesses in the worst-affected sectors are sufficiently supported through the next period of transitioning. Past experience tells us that the cycle of business failures usually starts 24 months after an economic shock. Therefore we can probably expect some restructuring and insolvency activity within that time period.
Though many business sectors have seen their trade severely impacted, other sectors aren’t so badly affected, and there has been abundant innovation as firms seek new channels to consumers and customers. How is your firm assisting such clients?
Our team has taken an active role assisting clients improve their online strategies. We have worked with clients to complete the required paperwork in order to avail of the e-commerce business development supports. We then work with clients to map out opportunities in the year ahead and how they can reposition themselves post lockdown.
Content adapted from the Business Plus online: "What’s More Important –Public Health Or Enterprise?" and "The leading indicators of our trading outlook have both performed strongly"
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