The Effects of the Pandemic on Your Business’s Operating Expenses


Though most companies shifted to remote working amid the pandemic, some offices still remained open. As usual, their employees still come and go, but observe physical distancing to limit the risks of spreading the virus. But if these employees are using public transport, interacting with different people, or going to other public places besides the office, then their company must be prepared to face health risks, or better yet, to reduce them.

Fortunately, companies are abiding by new health protocols. They’ve imposed new policies such as wearing face masks, practicing physical distancing, and frequent washing of hands. However, these preventive measures racked up every business’s operating expenses.

Hence, if you’re about to open your coworking space business, this guide will reveal your potential costs based on the pandemic’s impact on office expenses.

COVID-19-related Income and Expenses

According to KPMG, COVID-19-related income and expenses should only be the ones that are incremental and attributable to COVID-19. This means the income and expenses that wouldn’t have been earned or incurred if not for the pandemic, and wouldn’t have been expected to recur after the flattening of the curve.

Recurring income and expenses that you may still earn and generate even without a pandemic are not incremental. These include:

  • Payroll for idle employees
  • Depreciation of plant facilities when production was postponed
  • Rent and utility costs generated during temporary closures

On the other hand, these expenses can be easily attributable to COVID-19:

  • Additional cleaning and sanitation costs specifically for minimizing the risks of viral transmission
  • Temporary hazard pay to employees
  • Penalties for delays or non-performance of contracts due to COVID-19-related production issues
  • Rent concessions from lessors that occurred as a direct consequence of the pandemic

Other costs such as credit losses, impairment loss on non-financial assets, and fair value loss on equity investments, may be harder to determine whether they are COVID-19-related. The key to is identity your incremental income and expenses on a non-arbitrary basis.

New Office Essentials

These essentials will fall under the category of “additional cleaning and sanitation costs”:

  • Stationary Items for Each Employee

Sharing printers, copiers, and other communal items in the office will increase the risk of spreading the virus, so you must give each of your employees their own stationary items. These include pens, printer toners, and markers.


  • Sanitizers

Though your employees may bring their own hand sanitizers, you still need to place sanitizing stations around your office. Aside from the sanitizer itself, you should also buy bold signage to make the stations identifiable.

  • Reconfigurations

To ensure that physical distancing will be observed, you’d need to install barriers between desks, and partitions between communal areas. This may incur higher costs if your office has an open floor plan.

  • Face Masks

Depending on your business, you may require the constant wearing of face masks, or limit mask requirements to groups of four to five people. But before setting a policy, find out the mask regulations in your state first.

Reducing Expenses

Though the pandemic is forcing businesses to spend more, there are still ways to keep your expenses to the lowest possible.

Start by assessing your overall strategy. Identify your major cost drivers, and consider altering them. For example, if you spend most on electricity bills, limit the number of staff that can come to the office in a week. You can have only three employees come on a Monday, while the rest works from home. That way, only a limited number of computers will be run on the day, and you may even skip turning on some lights.

Next, cut administration costs by eliminating your underutilized tools. Or shift to paperless transactions to cut down office supplies. You’ll also help the environment in turn.

Ultimately, the key is to develop a financially focused mindset. You don’t need to be a cheapskate — just be practical. When you can easily identify unnecessary expenses, you’ll be able to cut down costs easily, without sacrificing work quality and productivity.

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