Preparing for a Post Covid World

A couple of months ago, Accountants Daily released an article on 5 ways small & medium enterprises can prepare for a post-Covid world. As there is a new vaccination on the horizon that has now started to land in Australia with the intention of being supplied to everyone over time, 2021 will have a ‘new normal’ and businesses will have to adapt. It is extremely important that businesses develop strategies around profitability and managing cash-flow, especially for those that are on Jobkeeper Extension 2.0.

The first tip was to check eligibility for Jobkeeper Extension 2.0 as businesses that weren’t eligible prior, may have become eligible. The deadline for this was in January and Graham & I and went through our entire list of clients to assess their eligibility and ensure no-one would miss out if they were eligible.

Tip number two is to analyse and improve your cash-flow. The ‘lifeblood’ of a business is its cash-flow as without a healthy cash-flow, the business won’t be able to meet its debts, obligations, pay employees wages or undertake its regular activities. Some simple tips to manage cashflow:

  • Debtor management – tighten up payment terms, chase overdue invoices, offer incentives for early payments, but most of all COMMUNICATE with your customers
  • Creditor management – stagger payments, negotiate payment plans and do bulk orders for a discounted price
  • Cut down on costs – negotiate better utility deals, purchase needed items in bulk, reduce or eliminate non-critical spending, look into working from home to eliminate office rent
  • Review your finances – check out low-cost loans, renegotiate loans with your bank, check your vehicle and equipment leases, know where you are at with them and if you can get a better price
  • Develop conservative forecasts & budgets – while things currently are still unpredictable, it is important to have budgets & cashflow forecasts, doing so helps to avoid shocks to the business

Tip number three is to create & strengthen your presence online. This is due to lockdowns, the world changing to work from home, less people going out-and-about, there is an increase in online spending. Operating over the internet has been helping many businesses survive the pandemic and if you aren’t online, now is the time to set up as Commerce is unlikely to return to how it was prior to Covid.

The fourth tip is to adapt to new technologies. Technology is going to become necessary to help save on administration & operating costs whilst providing connection points with customers & stakeholders.  Office businesses examples are cloud accounting, digital marketing, Skype or Zoom, social media. Retail may also benefit from online ordering coupled with courier & delivery services.

The final tip is consider working remotely where possible. A lot of our clients are ahead of the game in this area but having working-from home allows employees flexibility, reduces their commute as well as reducing expenses for employers such as office rent. Remote work also comes with risks, such as both physical and mental health so it is important to put mitigation strategies in place and have regular communication with workers, safe work practices & safe work-station set-ups.

The main thing to keep in your mind is that the pandemic is an opportunity and things are unlikely to go back to how they are. Consider adapting, resetting & strengthening your business.