Coronavirus COVID-19 – Minimise the effects on your business

Has all the negative media attention had you thinking about the effects of Coronavirus on your business?

Australian businesses are already being impacted by the effects of the Coronavirus and we understand that our clients will also have some concerns about the flow on effects to their own businesses.

No one knows the potential impact that will occur, however we are certainly aware of the current risks affecting business confidence and creating uncertainty within the economy.

You must be proactive in managing cash flow. Aim to reduce discretionary and non-essential expenses to minimise the impact on your cash flow. Cash flow is the key to survive and thrive.

We suggest the following points to consider now to assist your business and your personal finances through this turbulent time.

Our recommendations are:

  1. Ensure you collect your debtors within your trade terms.
  2. Maybe look at reducing your trade terms.
  3. If possible take payments upfront for services and supplies.
  4. Stop supply or servicing clients outside your trade terms.
  5. Pay creditors (suppliers) not before the full term of the agreement.
  6. Ask for longer trade terms from creditors.
  7. BAS payments to the Tax Office maybe deferred via a payment plan. Please speak to us and we can assist with this.
  8. If you anticipate a reduced profit or taxable income, vary tax payments down, being tax instalments on the business, and individual PAYG instalments.
  9. Review staffing levels and don’t be afraid to reduce staff hours if necessary.
  10. Don’t buy large equipment or other assets with working capital. (i.e. don’t use cash in the bank). Finance equipment over a long period to preserve your cash flow for working capital.

The Federal Government have recently announced the following measures to simulate the local economy:

  • Increase of the instant asset write-off increased to $150,000 for eligible businesses to 30th June 2021.
  • Cash flow assistance for business, small-medium business may be eligible up to $25,000 tax credits from the ATO to subsidies for employee PAYG obligations.
  • Stimulus payments direct to households, one off payments to low income, pensions and concession cardholders.

We will be keeping an eye out for the State Government’s upcoming stimulus packages and advise accordingly in due course. Please do not hesitate to contact us to discuss your business so we can assist in this uncertain time.