With close to 900,000 businesses now formally enrolled in the government’s JobKeeper program, the Australian Small Business and Family Enterprise Ombudsman (ABSFEO), Kate Carnell, has advised businesses to start planning for the future now.
Asked what businesses need to do to prepare for life beyond JobKeeper, Ms Carnell told MyBusiness: “What they shouldn’t do is wait till then because there’s a whole range of things happening at the moment.”
Speaking on the recent MyBusiness Live webcast on all things JobKeeper, Ms Carnell explained that small businesses could potentially be flooded with bills come September.
“The ATO has deferred payments for small businesses that have been affected. So many might owe the ATO, they’ve deferred them for six months, but you’ll have rent deferral payments, too. You’ll potentially have an SME guarantee loan, you’ll have to be starting to pay payments then as well,” she said.
“The banks have deferred payments on a range of loans you might have with them. So, the important thing right now is to be talking to your poor, overstressed accountant and sitting down and looking at what your cash flow looks like going forward.”
She explained that it’s critical businesses map out their cash flow now, ensuring they are prepared for potential outlays in September.
“What sort of income you might need, what sort of revenue you might need. In other words, a good planning tool here, so there won’t be any huge surprises when you get to that space.”
While encouraging businesses not to panic, Ms Carnell advised them to take action today rather than wait for a post-JobKeeper future to kick in.
“Hopefully, what’s going to happen here, and I think now we can be fairly sure it will, businesses will start being allowed to reopen, in fact encouraged to reopen probably in the next few weeks, and certainly in the next month.
“So, we won’t be in a scenario where on the 28th of September, all of a sudden you’ll be allowed to reopen and you’ll have all these new costs.
“You’ll be starting to be able to reopen to get your business back on track. But if ever cash flow planning was important, it’s now. And now for the next 12 months. So, please do it.”
Agreeing with Ms Carnell, Deputy Commissioner from the ATO Deborah Jenkins stressed that “now is the time”.
“If there was a time to be talking about cash flow, it’s now,” Ms Jenkins said.