With a COVID-19 vaccine on the horizon and Canberra businesses finding their feet, a post-pandemic ‘new normal’ is finally becoming a reality. Financial advisers say the new business landscape will require some adjustments, including developing strategies for managing cashflow and profitability – especially businesses that have been supported by JobKeeper, which is due to end in March.
RSM in Canberra principal Thiru Kandiah says there are a range of checks business owners can conduct now to position themselves well for the ‘new normal’.
“It is important to check your eligibility for the last few months of JobKeeper 2.0,” she says. “Even if your business didn’t qualify for the previous extension, you may be eligible for the second one.”
The main qualifying test for JobKeeper 2.0 for most small and medium-size businesses is a 30 per cent reduction in GST turnover compared to the same quarter in the previous year.
“If you do qualify, it will help tide your business over for a few weeks at least and give you time to consider strategies to ensure your business is prepared for when the program winds up,” says Thiru.
She says it is also important for businesses to analyse and improve their cashflow.
“Cashflow is often described as the lifeblood of a business, and with good reason,” says Thiru. “Without a healthy cashflow, a business won’t be able to meet its debts and obligations, pay employee wages or undertake many of its activities.
“Improvements to cashflow can come from better debtor and creditor management, cutting down on costs such as negotiating better supplier deals, reviewing your finance arrangements, and taking another look at your forecasts and budget to avoid shocks to your finances.”
She encourages businesses that have been hit hard by the COVID-19 pandemic to act early.
“Developing a business recovery plan early on helps to minimise personal exposure and improve the chances of a successful restructuring,” says Thiru.
Due to an increase in online spending, operating on the internet has been helping many businesses survive during the pandemic. Thiru says she has seen many clients strengthen their online presence and look at ways they can pivot their offering.
“If your business isn’t online already, now is the time to set it up as commerce is unlikely to return to how it was pre-COVID-19,” she says.
Technology is also likely to prove necessary for small businesses post-pandemic.
“For office-based businesses, this may include cloud accounting, digital marketing, video communication platforms such as Zoom or Skype, and automation of data entry and social media. Retail businesses may also benefit from online ordering platforms combined with courier delivery services,” says Thiru.
“Adopting the right technologies can help save on administration and operating costs, and provide connection points with customers and stakeholders.”
Throughout 2020, many employers introduced work-from-home programs. A large proportion of employees enjoy the flexibility and reduced commuting, but Thiru recommends at least reviewing these arrangements to ensure they work for everyone.
“While remote work can allow employers to cut expenses on office rent and outgoings, adding to the financial benefits, it does come with risks, such as to mental and physical health,” she says. “Employers need to ensure they incorporate regular communication with workers, safe workstation setups, and training in safe work practices.
“One thing is clear: things are very unlikely to go back to how they were. This means businesses that adapt will be the ones best positioned to thrive in the short-term and longer-term. So use this time as an opportunity to reset and strengthen your business, and improve efficiency.”
For more information, contact RSM in Canberra.
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