Coronavirus has already had a devastating impact on businesses and it appears that the financial impact will be felt for years to come. If your business is in trouble it can be difficult to know where to turn or what to do. So, we have put together this list of tips for you to follow to help your business survive the crisis.
1. Get professional advice
The number one thing you can do to help with your business problems, is to get professional advice. Things are changing daily and its hard to keep on top of what is happening. That’s where qualified professionals like those at Cactus Consulting can help. So call us for a free no obligation discussion.
2. Talk to the ATO and defer tax payments if necessary
The Federal Government is constantly changing and improving stimulus measures for business, many of which are delivered by way of tax credits through the ATO.
In addition to this, the ATO is allowing businesses to defer payment of tax incurred after January 2020 for up to six months. So, if you think you will have trouble paying your other bills, then take advantage of this arrangement. Once the crisis is over, you will be able to negotiate a payment arrangement with the ATO for any tax you still owe.
3. Talk to your landlord
Review your lease or tenancy agreement. If it does not provide that you can cease paying rent in the current type of circumstances, contact your landlord and ask for a rent-free period or a rent reduction. In an absolute worst-case scenario (and don’t offer this initially), ask for a rental deferment whereby outstanding rent will be able to be paid over time once the financial situation improves.
4. Keep your records up to date
You need to know who you owe money to and when debts are due for payment. So, make sure your books and records are kept up to date. This is also important for protecting you later if things get worse.
If you are unable to pay tax, it is IMPORTANT that you still lodge BAS or IAS when due. If you cannot pay superannuation for your employees you must also lodge Superannuation Guarantee Charge Statements with the ATO. This will help you avoid becoming personally liable for GST, PAYG Tax and superannuation, pursuant to the ATO’s Director Penalty Notice provisions.
5. Talk to your bank
Change all bank loans to (at least) interest only. At the moment banks are agreeing to at least a 4 – 6 months interest only period without question. If this is not going to be sufficient, then ask your bank to freeze all payments for at least 4 months, which all banks are generally agreeing to.
6. Negotiate arrangements with creditors
If you can’t pay the debts you owe to other creditors, get in contact with them. Ask for a discount if you pay them now, a deferment of the amount owed or a payment arrangement. This will help you keep on top of things but will also help you keep relationships with suppliers, which you will need in the future.
7. Stand down your staff or terminate their employment
If absolutely necessary, consider if you are able to stand down staff without pay, other than staff using any accrued leave entitlements. If employment contracts are silent on this issue then you may be able to do this pursuant to Fair Work Act provisions.
8. Consider if you can trade your way out of your current problems
If you had an unmanageable debt prior to January 2020 and coronavirus has had a further impact on your business, then it is going to be more difficult to rescue your business. However, that does not mean it will be impossible or that there aren’t other solutions available. But you need to confront your financial problems now and get professional advice.
9. Look after your health
The main thing to do at the moment is look after your health. And this includes your mental health. So don’t be afraid to ask for help if you need it and if necessary have a look at the resources at Beyond Blue and Lifeline.
Contact us for assistance
If you are struggling with debts because of coronavirus we can help. So, get in touch on 1300 906 966 or send us an email at email@example.com to have a free confidential initial discussion today.