The Institute of Chartered Accountants have issued a terrific checklist for small business owners to think about in coping with the pressures from the Coronavirus. Naturally discuss it with your accountant.
1. Your employees
With so much uncertainty, a clear communication strategy is essential to maintain connections with employees. Make sure you keep them in the loop, share details of the actual and possible future business impact of COVID-19.
Get advice about helping employees with emergency health-related benefits, and encourage your workers to get vaccinated against known strains of the flu. If paid for by the boss, this is FBT free.
2. Managing a downturn
In times like this, cashflow is key… it’s important to realise that business resilience has as much to do with recovering after COVID-19 as it is about managing temporary setbacks.
Hasty decisions can prove costly in the long run. Get advice on adjusting your marketing strategy, perhaps this means going from an overseas audience to a domestic one?
Manage debts owed to your business proactively. For debts owed by your business, contact suppliers and seek their support. Landlords may be open to temporary rent reductions or lease variations.”
3. Supply chain
Talk to critical suppliers about their ability to deliver reliably. Consider temporarily seeking alternative suppliers where the current business supply chain involves countries severely impacted by COVID-19.
Network with similar businesses to see if they have surplus supplies to sell. Promote those product lines less impacted by supply chain issues.
4. Travel restrictions
Continue to monitor Australian Government warnings about travel to countries with major COVID-19 outbreaks.
Many businesses have already stopped business travel altogether.
5. Your online strategy?
Can your business’s online marketing strategy be ramped up to attract a new pool of online customers to help you combat a possible downturn?
For employees, check whether your IT systems facilitate working from home arrangements and video conferencing.”
6. Compensation receipts
Check current insurance policies carefully to see if there is any scope for claiming and discuss with your small business adviser the taxable nature of any compensation receipts received.
7. Financing commitments
Engage early with financiers if there will be difficulty in meeting interest and loan repayments.
These discussions need to be formal and should include the steps currently being taken to manage the downturn and the recovery plan for when conditions improve.”
8. PAYG instalment (PAYG-I) variations
Australia’s PAYG-I tax payment system has built-in mechanisms allowing taxpayers to vary their instalment which, for most, are paid quarterly.
The March 2020 quarter looms as an important opportunity to consider varying down the instalment payable late April.”
9. Tax payment problems
Don’t bury your head in the sand and hope they’ll just go away – this isn’t a good strategy when dealing with the ATO.
Keeping your tax returns and Business Activity Statements up to date will mean the ATO is more open to tax debt deferment requests.
10. Government support
Your business may be eligible for government incentives and concessions. For example, some State governments have announced a payroll tax deferral package for small and medium businesses impacted by the coronavirus.