When news of the COVID-19 vaccines broke, for a short moment there seems to be a light at the end of the tunnel. However, with nations scrambling to secure the vaccines for citizens and shortages being reported, the shadow of COVID-19 may still linger a while longer.
The pandemic has massively impacted businesses in Singapore the previous year but worse may be still to come. The repercussions of the disease are likely to continue impacting businesses in 2021 and beyond.
The global factor
Singapore is heavily dependent on its trade and tourism sectors, both factoring enormously to its economy. Unfortunately, our nation’s efforts in controlling the pandemic are not enough. Singapore is also dependent on the success of other countries that have strong ties to it.hhbjh
- Record low tourism number
With an ongoing pandemic and travel restrictions in effect, Singapore recorded its lowest visitor arrivals in four decades. Moreover, any visitors to our sunny island will require a valid entry pass or an approved letter of entry from the Immigration and Checkpoints Authority (ICA) before access is allowed. Recently, it was announced that those with travel history to the United Kingdom or South Africa within the last 14 days will not be permitted to enter even with prior approval given.
The fear of contracting the virus will also weigh heavily on a traveller’s mind. The tightening measures introduced in the wake of the pandemic have drastically reduced the demand for travelling. Both factors will continue to have a massive impact on the affected businesses and sectors in the tourism industry.
- Restrictions on import and export
Tourism is not the only industry to be affected by the pandemic; the import industry was also heavily hit. COVID-19 has severely taxed the healthcare industry’s resources, with personal protective equipment (PPE) and oxygen tanks rising in demand. With hospitals requiring PPE usage in their day-to-day fight with COVID-19, many nations have halted the export of this product and other medical protective equipment to meet their internal demand.
Thankfully, this does not apply to every country. Still, businesses that need to import or use the listed products from affected countries may find themselves in a bit of a bind. They can import the products from other countries, but this will involve negotiating a deal with new suppliers. The demand for these products will also drive up prices leading to increased cost for the impacted companies.
The local factor
Singapore has done an admirable job containing the virus, but the situation is still delicate. Any slip up can lead to a mass breakout in the community. The recent spikes in community cases show that the country cannot let its guard down yet.
The government has encouraged citizens to minimise their time outside during the pandemic and introducing measures to curb overcrowding. The reduced crowd, combined with the dwindling tourist count, have brought many retail chains to its knees.
While others have adapted by capitalising on the rapid growth of online shopping, some local businesses do not possess the technical know-how to take their business online. The overreliance on a physical crowd may find these businesses eliminated in these trying circumstances.
Recognising the challenges that businesses face in this uncertain time, the government has introduced several schemes to help small and medium-sized enterprises (SME). Some examples include the “Enterprise Development Grant” which can be used to subsidise the cost of your business’ projects and the “SMEs Go Digital” initiative which encourage enterprises to embrace digital technologies to drive their businesses.
Conclusion
COVID-19 has transformed the economy, upended traditional business models and disrupted supply chains. The pandemic’s long-lasting effects may only come into sharper view later in 2021, and the ripple effects could have unforeseen consequences.
During these trying times, it’s important to stay on top of your business financials and ensure a steady flow of cash for your operations. At Ackenting Group, we pride ourselves as one of the best audit firms in Singapore. Let us offer our audit services to deliver accurate and timely financial reports so you have a better understanding about the financial position of the company. And together with our corporate accounting services, you can receive sound advice from our experienced accountants for strategic planning to ensure proper management of your cash flow and financial stability to tide over this crisis.
If you require any assistance on accounting services, feel free to drop us an email at johnwoo@ag-singapore.com or contact us at +65-66358767. At Ackenting Group, we offer a complimentary 30 minutes online consultation for us to better understand your business requirements.
