Cash flow and subsidies top concerns
Bay accountants in demand as business owners seek advice
Business owners’ biggest post-lockdown concerns are for their cash flow and the impact of wage subsidies coming to an end, Bay accountants say.
Manym however, had confidence in their team’s willingness to do what it would take to survive, with the lockdown giving some a new outlook on future business ventures.
KPMG private enterprise partner in Tauranga, Tracy Prestonlett, said some clients were feeling the pressure of an unpredictable outlook.
Some were constrained in terms of their financial position, exposure to an impacted industry or where their strategy was now threatened leaving them to rethink their short and mid-term plans.
“Others, however, have capitalised on the headspace from the enforced lockdown to consider their business post-lockdown world with a new perspective and are now activating those plans,” she said.
Preston-lett said she was seeing an increase in client base and an uptake of new engagements in cashflow work, business continuity and general advisory work.
Clients had a “mixed-bag” of needs including understanding what government support they could access and had run various webinars to address Covid-19 issues.
Business owners were feeling a range of emotions as they kickstarted
Tips for small business owners post-covid-19 lockdown KPMG — Tauranga
1. Seek advice
2. Never waste a crisis
3. Don’t ignore reality
4. Have a plan
BDO Tauranga Ltd
1. Understand your cash requirements and look for opportunities in this volatile environment.
2. Insist on commercial advice from your chartered accountant — not just tax advice
Small Business Accounting Tauranga
1. Don’t bury your head in the sand.
2. Taxes don’t go away.
3. Consult with your accountant.
4. Set a realistic forecast of the next 12 months, two and five years.
5. Factor in different what ifs scenarios. Your accountant can their businesses again, she said. “There is a lot of unpredictable headwinds to navigate and many sit outside of their control, such as election outcomes, government support, economic outlook, global factors and credit availability.
“They’re probably most confident about their own teams and the willingness of those people within the business to do what it takes to survive.”
Director at Ingham Mora in Tauranga, Tom Beswick, said his team had been busy during and post lockdown mostly helping existing clients “get through”.
“We have taken on 10 staff in the last three months as a result of growth so we are confident in things bouncing back.”
He was aware of only a few help with these.
Top tips to manage accounts Ingham Mora — Tauranga 1. Keep the bank/ird/creditors onside through good communication. If you’re going to struggle to pay something then tell the person before you pay late. Most people will work with you but clients who were “severely impacted” going forward but did not tend to have many retail, hospitality and tourism clients.
Beswick said clients were needing the most help with understanding government announcements so they could get what they were entitled to.
“Clients often need our help to negotiate payment plans with the IRD and also to help get them of penalties and interest for any payments they were late in making due to Covid-19.
“I think a lot of people thought the IRD was just going to write those penalties off automatically but there is nothing automatic about it.”
Some were also needing help with planning for the future, he said. for the future. Manning said clients were needing the most help with re-setting their strategic and financial goals, financial advice and forecasting as well as credit applications for banks.
“Businesses in financial difficulty require independent advice from an experienced business turnaround specialist.
The sooner the business owner engages with a suitable specialist, the greater the chances the business will actually survive.”
Small Business Accounting Tauranga owner Megan Tomalin said the general feeling among clients post lockdown was uncertainty and stress.
“Sadly, [we] have seen a few clients whose business have been knocked out overnight as they are connected to the tourism industry,” she said.
“Other clients in import or retail have severe concerns over the future viability of their business.”
Tomalin said trade clients were experiencing busy times catching up after lockdown while some retail clients were thriving as people chose to spend locally instead.
“Also with the bank interest rates so low and expected to fall further, [people] may as well enjoy their cash.”
Post-lockdown, Tomalin said her team had been “very busy” with clients bringing in paperwork after not being able to in alert level 1 and 2.
She said there was a general feeling of uncertainty at this time.
“The worldwide situation is concerning, with Covid back in the country and the border debacles, it is adding to peoples fear and uncertainty.”
To help people move forward following the lockdown Tomalin advised they review their business and check if it is sustainable and they can “meet the new normal”.