When Receipt Bank spoke to Michele Grisdale, one of our partners in Australia, one thing stuck out.
“The message I am relaying to clients is simple. Cash flow is king; now, it’s the critical factor in planning any next step.”
For businesses navigating an altogether different working environment, the challenge is a straightforward one to grasp: stabilise the bottom line, and look to build from there. Inspired by our mission to help you keep business going against the backdrop of COVID-19, we spoke to small business experts from our accounting and bookkeeping community to uncover five key areas of focus during this testing time.
1. Identify what is essential…
“Cancel non-essential subscriptions where there are no penalties for early termination. It is a good opportunity to streamline expenditure in general too – you can separate the core expenses into necessary and nice to have.” (Mobeen Ismail, Director at Reed Dawson Ltd)
“Treat this as an opportunity. It’s a great time to sit down and look to “trim the fat” from your business. For example, look for all those places you have unused software or other subscriptions, and make some decisions about what is really essential and what is not. Go back and look at your costs for the last month and decide if there is anything you could do without. (Steve Maginnity, Principal at Mainsail Accounting Solutions Pty Ltd)
2. …but be careful to consider deferred payments
“I will caveat that by saying, while repayment deferrals and rent deferrals are a great option, it’s important to keep in mind that deferrals are just that.
“They still have to be paid in the future, and there is no guarantee of extra revenue in the future to repay them – for this same reason, I’m advising business owners to avoid loans where possible. If your business usually runs a bit lean, a loan or deferral is probably not a great option. Look instead for any government grants or assistance.” (Steve Maginnity)
Bringing us neatly onto…
3. Take advantage of government tax relief
“All the government support schemes are available available for you to take advantage of, including deferment of VAT and SA tax payments on account if you need them. Ask for time to pay on other tax liabilities if necessary; they’re on hand to help.” (Catherine Maciocia, Director at Fife Business Services Ltd)
“It’s about awareness as much as anything. Ensure you are aware of the tax deadlines that have been deferred to ensure you are able to keep the money in your jeans as long as possible.” (Chantal Sadorsky, Leading Edge Bookkeeping)
“I would suggest using the government programs that are subsidies, but only if you need them. I love that some of the businesses I work with have said they don’t want to take this subsidy as they can support themselves for the next 3 months, and they don’t want to add to the taxpayer burden. Of course, on the other hand those supports are great for those that need them.” (Paul Burns, Owner at Woodennickel Solutions Inc.)
4. Communicate with your customers
Remember that many of your customers will be in the same boat, and will appreciate open and honest conversations as early as possible. As one of our small business owners highlighted in a recent Keep Business Going article, maintaining a sense of company culture is key, despite the difficult circumstances we find ourselves in.
“Take advantage of any and all support available. Contact suppliers to negotiate discounts and payment plans, and talk to customers about their needs and how you can meet them. (Suzanne Fox, Accountant at virtualaccountingservices.net ltd)
5. Contact your accountant
All of our experts have one thing in common: they are accountants or bookkeepers that specialise in supporting small businesses. They’re too modest to recommend this advice, so we’re going to do it for them: contact your accountant as much as you feel necessary during this time. Their expert advice is primed and ready to help you keep business going.
Melissa Lawlor | Marketing Manager, Receipt Bank Australia