How LDB can support your business during the coronavirus (COVID-19) outbreak
March 20, 2020
As with all businesses across the nation, LDB is hard at work managing our response to the coronavirus (COVID-19) pandemic to ensure the safety of our staff and visitors, and to continue providing key services to clients.
The accounting, audit, wealth, superannuation and property teams at LDB have put in place measures to address the current crisis. During this time, we will continue to adjust our response in accordance with government advice as we likely enter a time of greater social isolation.
At present, we encourage any non-essential meetings with our staff to be conducted by phone or through video conferencing facilities we can provide. We require clients who have travelled overseas in the last 14 days or who are unwell to refrain from meeting in person with any staff. With the possibility of future quarantines or significant staff absences, we are also ready to implement technology solutions to allow our staff to work from home to ensure services continue.
Our business continuity policies and procedures are in place and functioning. We encourage all our clients to reach out if you would like to discuss our approach or if you have concerns around your own business.
Stimulus package for small and medium business
You may be aware that the Australian Government announced a $17.6 billion stimulus package to support small and medium businesses. The package is designed to support maintaining employment in the workforce and includes:
- “Boosting cashflow for employers” which will apply credits up to $25,000 against 50% of the PAYG withheld against wages for businesses with aggregated turnover up to $50 million. A minimum payment of $2,000 will be made to eligible businesses regardless of PAYG obligations. This will be implemented through the Activity Statement System from April 28 in respect to the March 2020 and following quarters.
- Eligible employers can apply for a wage subsidy of 50% of an apprentice’s or trainee’s wage for up to 9 months (from January 1, 2020 to September 30, 2020)
- Immediate asset write-off increased from $30,000 to $150,000
- One-off payments to lower-income Australians of $750 from March 31, 2020
- An allocation of $1 billion to a coronavirus relief fund to support severely affected regions.
Should you require any assistance with the above, please contact your adviser.
Managing your business during coronavirus pandemic
The coronavirus crisis will impact businesses across Australia in many different ways. There are still fundamental good business practices to implement to ensure your survival. We recommend the following key areas be addressed:
- Implement solid cashflow forecasting. Ensure you understand the impact on sales receipts, supplier payments, and overheads such as rent. At this point, we recommend this be calculated and estimated on a weekly basis for the coming months. If you are not already in this habit, and need assistance to put processes in place, please contact your LDB adviser.
- Manage staffing needs. If your business is suffering a dramatic reduction in staffing requirements, limit your use of casual staff and the hours of part-time staff, and implement your full-time staff across the business as necessary. Keep in mind that you will likely need this staff again once the crisis is over. Most people will be supportive of a reduction in hours of work to support the business and preserve their position. Keep in mind your obligations – Fair Work Australia has some guidance here.Consider how your staff are managing the crisis. Managing relationships with your staff is one of the most critical elements of any business in the best of times, let alone now. With many people under pressure in the community with family and other needs, ensure the mental health of your staff is being considered and supported.
- Consider your customers. How are your key customers trading? Be active in discussing if they will they be in a position to pay on your current trading terms. Consider whether it is worth offering discounts for early payment. For larger projects, consider payments in stages. Look after them now as best you can, although ensure you will get paid for doing so.Should you have spare capacity as a consequence of the downturn, now may be the time to pursue new customers and opportunities you may not ordinarily consider. Are there services you could add to your offering to keep your staff employed?
- Contact your suppliers. Engage with your regular suppliers and ensure continuity of supply for the critical stock needed in your own business. Ensure you have a solid relationship with them and can call on them in this time of need.
- Landlords and rent. If needed, consider whether you can approach your landlord for a rental reduction throughout the crisis, or at least a deferral while cashflow is tight. Many landlords would prefer a lower rent over a vacant property at this time.
- Banking. Will your business require assistance from your banking/finance relationships to make it through this difficult time? It may be via an overdraft or a restructure of existing long-term facilities. If you haven’t already prepared them, you will likely need your 2019 financials and returns completed, and possibly the cashflow forecasts referred to earlier. The federal government is providing support to financiers which will flow through to small and medium businesses. Get in touch with LDB where this is necessary.
- Tax office. After the fires, floods and now the coronavirus, the ATO is approachable and being considerate to the needs of businesses over this time. While you can’t defer your obligations indefinitely, they will be receptive to any reasonable proposal of a payment plan. We are already aware, anecdotally, of three-month stays of payment. Where we can support you in this, please contact your adviser.
LDB is here to help you
At the moment, LDB is continuing with business as we always have. We are aware of the likely areas you may need assistance and our staff and systems are sufficiently robust to continue our support through this difficult time.
During this time, we urge you to care for your families, employees and your community. As with any crisis, it is important to maintain your support networks and stay in communication whether in person (where appropriate) or via your social networks.
If you have any questions about your business or personal financial situation, we’d be happy to help. Give us a call on (03) 9875 2900 or send us a message via the contact form below.