THEY say a small leak will sink a great ship. But this is not about leaks, nor anything related to sea vessels. It speaks about spending that, when not properly recorded and accounted for, can put a dent on savings over time. Personal money management does not require a sophisticated process and usually, sticking to an expenses plan and setting the right financial goals do the trick. However, for cost management intended for businesses, a different ball game is needed.

When the pandemic struck almost two years back, financial managers and personnel of businesses bore the brunt of its effects. Suddenly, finance departments were put on the spot for their plans on managing corporate funds at the height of a changing business and economic landscape. What ensued was a corporate turmoil. No one had foreseen the onset of the Covid-19 pandemic, more so its financial impact. Businesses saw significant declines in revenue and, at the same time, they saw their debts piling up. According to the US Census Bureau Small Business Pulse Survey — a study with small businesses as respondents — 83.5 percent of companies in the food services industry admitted having recorded adverse effects at the start of the pandemic. Of those surveyed, 31 percent predicted that they would likely see business return to normal only after six months from the time the pandemic hit. The Philippine Statistics Authority, in a report released in March this year, stated that a 12.4-percent decline was recorded in the gross revenue index in 2020, with transportation, storage and communication, and real estate, among other sectors, plotting the steepest drop. Top companies in the country were not the only ones directly affected by the pandemic. A report released by the Asian Development Bank provided that nearly three-fourths, or 70 percent of small businesses surveyed, closed shop temporarily. More than half of business-respondents claimed to have seen revenues decline by over 30 percent.

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