Running a business can be challenging at the best of times let alone when you’re having to deal with a pandemic. The coronavirus is proving to be quite a disruption to businesses across the globe and everybody is in a similar boat of trying to navigate through this as best as possible.

I’ve put together a summary of what to cover to ensure that you are putting your best foot forward during this time.

Health

It goes without saying that the number one focus is your health and that of your loved ones. “Everyone must practice good hygiene to protect against infection and prevent the virus spreading.”  Click here for regular Government updates.

Workforce

Providing clear communication to staff on the business impact of COVID-19 is important as is employee buy-in on the different things to action to get through these challenging times.

It is important that staff know you are constantly looking at Government directives and guidance at all times and advise of any changes related to work.

Cash Flow

It is critical that cash is a) preserved and b) managed whilst you are navigating your way through the impact of coronavirus on your business.

Cash preservation means that you should negotiate payment plans with your suppliers; look at rent reductions or lease variations with your Landlord; and hold off on all non-essential purchases which are not revenue generating.  Also, it is important to understand leverage with the ATO in relation to tax debt – this is addressed below.

Cash management is ensuring that you put in place a cash flow forecast and understand your break-even position so that you are informed and pro-active with your decision making. It is best to work through a couple of worst-case scenarios, understand your response times and what the business needs to do to stay afloat under each scenario.

ATO Support

PAYG Instalment Variations

  • ATO allows taxpayers to vary instalments which, for most, are paid quarterly.

Tax Payment Plans

  • There is a lot of empathy towards small businesses at the moment and so long as you’re communicating with the ATO, they are open to putting in place a payment plan for any outstanding tax debt.

Government Support

The Australian Government has released an economic plan to support businesses as they deal with the challenges posed by the spread of the coronavirus. Below is a summary of what you can avail of:

Support for business investment

  • Tax Saving via an increase of instant asset write off threshold from $30,000 to $150,000 until 30 June 2020, for businesses with turnover of less than $500 million.
  • Tax Saving via 50% investment allowance to the purchase of eligible assets until 30 June 2021 for businesses with turnover of less than $500 million. Existing depreciation rules will apply to the balance of the asset’s cost.

Cash flow assistance

  • Assistance for businesses with annual turnover of less than $50 million to cover the costs of employee wages / salaries equal to 50% of PAYG with a minimum of $2,000 and a maximum of $25,000 over six months.
  • A wage subsidy of 50% of an apprentice’s or trainee’s wage for nine months. The subsidy of up to a maximum of $21,000 will be available to businesses employing fewer than 20 FTE who retain an apprentice or trainee, or, where a small business is not able to retain an apprentice, the subsidy will be available to a new employer.

Assistance for severely affected regions

  • $1 billion to support those sectors, regions and communities that have been disproportionately affected by the economic impacts of the coronavirus, including those heavily reliant on industries such as tourism, agriculture and education.
  • The Government is also offering administrative relief for certain tax obligations, including deferring tax payments up to four months.

Supply Chain

Communicate with your main suppliers and confirm that they a) are able to deliver on time and b) accept your payment arrangements.

If you are importing goods, it is also advisable that you hedge against foreign currency movements should you need to pay your suppliers in a foreign currency.  This will limit the impact of any currency movements on your business.

Let Us Help

ABJ Solutions is working to find the best solutions and to understand the benefits of the Stimulus Package.  We are working on behalf of businesses to secure ATO payment plans and deferred payments that helps to preserve cash.

ABJ Solutions is passionate about businesses staying cash flow positive and helping them understand how best to achieve this. Get in touch with us today if you need assistance in working your way through the impact of coronavirus on your business.