Post JobKeeper – time to seek professional advice

The JobKeeper program supported more than 1 million businesses and 3.8 million employees during the pandemic, but with the final JobKeeper payments made on March 28^th,  Australia is now without a wage subsidy program.

With many small businesses in survival mode, it is essential that cashflow is carefully managed, to ensure future expenses can be covered.

So, what are some practical steps small businesses can take?

Speak to an accountant

Having a good accountant by your side is one of the most important business decisions you can make, particularly in turbulent times, and there are many ways an accountant can help.

Businesses that seek out professional, expert advice are more likely to survive and thrive, with a more sustainable, long-term plan. An accountant can help you to understand how your business is performing, how to access finance and help to plan for the future by helping you to make key business decisions.

Review staffing

For many businesses, cost control will be inevitable and staff costs will be a key part of this.

Now that JobKeeper has ended, employees will have an automatic right to return to the hours they were working prior to any JobKeeper Enabling Stand Down Direction, but with employees who are casual, employers are generally able to vary their hours as they see fit. If this means that a casual employee can no longer be offered any hours due to JobKeeper ceasing, then employers can do this.

If you do decide to take action to protect your business, make sure you consider employment law and seek advice should you need it.

Look at ways to cut costs

That might mean negotiating pricing with your suppliers, automating time-consuming tasks with software, or eliminating any spending that doesn’t contribute to your business goal. 

It is important to open dialogue as soon as possible where it is likely payments to creditors could be missed. To get your suppliers and landlord onside, engage proactively.

Consider a business loan

Your bank is probably your first point of contact as they will know you and your business, however, you should also consider alternative lenders who may be able to help you in the short term.

If your business is in the position to service a loan, there are many types of business finance that can free up your working capital and boost your cashflow. The government has renewed its SME Loan Guarantee Scheme, where it’s guaranteeing 80% of loans issued by eligible lenders. This scheme covers loans of up to $5 million over 10 years, with a 24-month repayment holiday also included.

It’s very important that you don’t incur debts you can’t pay. Business owners and directors can be held personally liable for insolvent trading.

Know your numbers

Understanding how your business is performing is critical in difficult times. You are likely to have to make important decisions to help support the business and this needs to be based on an accurate view on where the business is and where it’s going. Cashflow is going to be key.

Make sure your accounting records are up to date and work closely with your accountant. Now could be a good time to update your systems and take advantage of some of the tools and technology available to help you understand the numbers and save time and effort.

Once your figures are up to date, you can more accurately predict demands on your future cashflow, make more informed decisions and get a clear picture of what your business and, more importantly, you and your family may need over the next few months. 

Forecast your cashflow

Most businesses will have some working capital available, but this can quickly be used in challenging times. Use your knowledge of your numbers and understanding of future income, orders, costs, commitments, etc. to look at how you and your business can cope with a fall in income. Ask your accountant to help if you need support to do this.

If you are interested in finding out more about the services that TaxAssist Accountants provides, please talk to us on 1300 513332 or use our online enquiry form. We can offer initial consultations, advice and support over the phone if you have any concerns about face-to-face meetings.
 

 

Date published 20 Apr 2021 | Last updated 20 Apr 2021

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.