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Please see some key points below you need to consider right now to protect your business and manage your cash flow:

  • Contact your bank. Banks are offering holidays on loan payments. Westpac yesterday have a fairly automated service to defer principal for three months. The ANZ CEO on radio last night saying they were offering longer term deferrals of principal and interest. Contact your bank and see what is possible.
  • GST – Business on a quarterly GST cycle, may elect to change their GST reporting and payment to monthly, to get quicker access to GST refunds you are entitled to. However, this change would be locked in for 12 months and would start, if you did now, from the start of the next quarter, thus 1 April 2020

  • Pay as you go Installments – you can vary installments on your activity statement for the March 2020 quarter. Businesses that vary their PAYG installment rate or amount can also claim a refund for installments made for the Sept and December 2019 quarters.
  • Check your business insurance. Understand what it allows for. Understand the triggers. Does it allow for business interruption or like event?
  • Understand your obligations with employees. If your business is having trading difficulty, you may be able to stand employees down. This is not nice and nobody wants to do this, but my suggestion is, understand your obligations. Plan for this.
  • Extend your payables, intelligently. Be on the front foot, extend payments where possible, communicate with your suppliers. ATO in the same boat – we have given detail on this already. Extend where possible.
  • Consider your accounts receivable. Can these be bought in? Do you have any at risk? Actively manage these and do what you can. Communicate.
  • Be careful on who you supply goods or services to – make sure payment can be received promptly.
  • Plan for your business to keep going – can employees work from home? Work needs to happen on your IT infrastructure and cyber security along with assessing the suitability of the workplace. We have attached a sample workplace health and safety checklist you can use as a guide. Download the guide here Working_from_Home_Safety_and_Wellbeing_Checklist_1_.pdf
  • Manage your inventory. Review it. Don’t necessarily reduce, but understand it, be comfortable with it. Understand how long it takes to turn your inventory into cash and find ways to speed this cycle up. 
  • If you are a tenant, review your lease. There may be a clause that allows for suspension of obligations or termination of the contract if natural and unavoidable catastrophes or specified events occur. See if your landlord will come to the party if a serious event occurs, such as lock down or you have a significant downturn in trading.