A guide to surviving COVID-19 for SMEs
Managing Cashflow: Reducing and deferring expenses
- 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.
- 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.
- Contractors should also be considered.
- 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.
- Personal subscriptions are another area that should be considered ie Netflix, Foxtel etc or any other subscription.
- 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.
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: