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A guide to surviving COVID-19 for SMEs

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Managing Cashflow: Reducing and deferring expenses

by Mar 28, 2020COVID-19 Resources, Managing Cashflow

Reducing Expenses

  1. Can you reduce your staff? Qantas has set the standard by standing down 20,000 staff with no pay.   I did some research for a client yesterday about standing down staff without pay.  It can be done where there is a national disaster or an event beyond control of the business.
  2. Could you reduce the hours of your staff? If the business is slowing down, you may consider just simply reducing the number of hours staff are working.
  3. Contractors should also be considered.
  4. Go going through all expenses on your profit and loss statement with a fine tooth comb. Consider whether any of them could be terminated for the duration of this event.
  5. Personal subscriptions are another area that should be considered ie Netflix, Foxtel etc or any other subscription.
  6. You should also consider as to whether you are going to continue with your private health insurance. We understand that some Private Health Insurers are offering payment deferrals.

Deferring Expenses

In a newsletter to come shortly, we will provide more elaborate information on the ATO’s deferral initiatives.

But in the meantime the following areas can be addressed for possible deferral.

  • Regular/monthly car payments
  • Business loan repayments
  • Credit cards
  • Changing a principal and interest mortgage to an interest only mortgage might also provide some breathing space.

There’s also been an announcement today by the Australian Bankers Association.  See below:

https://www.ausbanking.org.au/banks-small-business-relief-package/

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