An accounting expert attributed it to the repercussions of "Covid-19"
20 advice and steps for restructuring and maintaining companies in the market
The labor force must be utilized by developing appropriate alternatives to correct the employment structure.
Photography: Patrick Castillo
Mohamed Helmy: "The goal of the restructuring is to fulfill companies' debts, increase their profits, and overcome financial difficulties."
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The financial expert, accounting and tax agent, Mohamed Helmy, said, “The (Covid-19) pandemic has forced a number of companies to engage in restructuring companies and institutions, in accordance with the idea of either surrendering to the current situation, or staying and standing firmly to face challenges and create the future."
He indicated that this step was a procedure for the necessary development and correction of the economic and financial structures of the business sector, in a way that enables it to remain in the market and compete, and even to continue successfully and achieve a suitable return, indicating that there are 7 tips and 13 steps for the corporate restructuring process.
Restructuring
Helmy added to "Emirates Today" that the general goal of the corporate restructuring process is to fulfill their debts, increase their profits, and achieve effective results that enable them to overcome financial difficulties.
He explained that the successful restructuring of any company should lead to reorganizing the original form of the company, which was affected by general economic recession factors, mismanagement, or unexpected crises such as "Covid-19".
Helmy provided seven tips for companies to develop a quick corporate restructuring strategy:
■■ Move quickly, but only move according to a strategic plan.
■■ Rescheduling and canceling debts, where negotiations are made with creditors to schedule the debts or to assign part of it.
■■ Converting debt into equity, as this tool is used to support the facility, by converting debt or part of it into a share in capital. This step may be considered somewhat dangerous, but it is among the solutions.
■■ Revaluation of assets, because many assets may have a book value less than the real value, and they can be revalued in order to cover part of the accumulated losses.
■■ collecting receivables from others, where a time schedule must be prepared to settle the arrears from others, and with others, in order to provide the necessary liquidity.
■■ Development of management and managers ’skills, as the administrative and organizational methods are developed in the facility through evaluating the efficiency of management and its leadership ability, and what possible adjustments can be made in this regard.
■■ Benefiting from the work force, by developing appropriate alternatives to correct the structure of employment. Therefore, a number of points must be dealt with in this regard, including the excess employment, the development of the wage structure and the incentive system, the continuous training and the development of workers ’capabilities.
The restructuring plan
Helmy indicated that in order to restructure the company's departments, define their tasks and develop a work plan, 13 steps must be followed:
■ Study the existing situation as it is, with weaknesses and overlapping tasks.
■ Laying down the main tasks required of each department and consequently of the administration.
■ Laying down the administrative structure for the department and its specific functions, and determining vacancies.
■ Developing a complete job description for management jobs, in which the job’s tasks are explained accurately and in accordance with what is required of the job, and not based on the skills of the current employees occupying these positions.
■ Identifying the capabilities of the current employees and comparing them with the required availability for each job, and placing each employee in the appropriate place for him, if any, unless he is transferred or dispensed with.
■ Defining the forms used in each job to carry out its tasks specified in the job description.
■ Developing detailed policies and procedures governing the work of the department's functions, which specify the limits and powers of each job (or update the existing ones if they exist).
■ Developing and drawing the documentary cycle for the forms, and the work flow for each part in the functions of the concerned department only, without going into the details of the documentary cycle in the departments associated with the job from other departments, and it is sufficient to refer to the role of other departments briefly, so that there is no duplication in the drawing of the documentary cycle.
■ Defining the job outputs (reports - productivity) and the people benefiting from those reports, or the next step that follows the output of this job, as is done in production lines or sequential jobs in which the work of the next job level starts with the end of the previous job level from completing his work, and presenting his work output Reports - Productivity).
■ Circulate all of the above to the concerned persons and related parties from the other departments of the company.
■ Training management personnel on the above, to use forms and their documentary cycle, and to inform them precisely of their job duties, and the position of each person in the administrative structure, the person responsible for it, and the persons responsible for them.
■ Developing a sub-work plan for each employee, specifying his main tasks, which generally should not exceed 10 main tasks, and also specific quantitative measures to accomplish those tasks, and all tasks must be specific, clear and measurable, and are not subject to personal discretion except in the narrowest limits, such as Evaluate other behaviors related to personality rather than achievement, on which to base it will be evaluated.
■ Evaluating employees according to the percentage of completion of the sub-work plan for each employee, and the administration as a whole, to evaluate the performance of the department manager as a whole and the company in general.
Rescheduling and canceling debts, by negotiating with creditors over scheduling or assigning part of it.
Successful restructuring should lead to a reorganization of the original form of the company.
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