A survey by business recovery and insolvency firm Jirsch Sutherland reveals that Aussie business owners are more worried about their cashflow than they are about issues around the JobKeeper scheme.
Over a third of the over 1000+ business owners and directors canvassed nominated cashflow and turnover as the key causes of their stress, with just 10 per cent saying JobKeeper ending was their primary concern.
“More businesses fail due to lack of cashflow than due to lack of profit,” Bradd Morelli, Jirsch Sutherland’s National Managing Partner, said. “If you’re a business owner or director who’s experiencing financial stress, it’s more important than ever to assess your current and future cashflow situation and revenue streams, particularly taking into consideration when the government’s ‘life raft’ will no longer be there.”
More than half of the businesses surveyed have turnover ranging from $1 million to $10 million and are exploring options to address it. The report noted that over a quarter of businesses are exploring reconstruction or insolvency in the next six months despite benefiting from JobKeeper and other government stimulus measures. Another quarter did not claim payments but may either restructuring wind down their business. One in five took advantage of the measures and don’t expect to restructure or explore insolvency once they end.
“JobKeeper and measures such as the ATO’s cash-boost scheme have certainly made a difference to the medium-term viability of these 20 per cent of businesses,” Morelli said. “That’s great news, but it’s still a good idea that they continue to assess their businesses and plan, both for current conditions and the long term.”
And with over half of respondents experiencing hardship and currently exploring or expecting to look at restructuring or insolvency options in the next six months, a third have stated that they will consult their accountant for a recommendation on such options another third plan to turn to Google for information.
“If you’re under financial pressure, it’s crucial to speak with a trusted adviser rather than rely on a search engine,” Morelli said. “Insolvency procedures and restructures can be complex and stressful, and it’s important to appoint a practitioner that is a right fit for your business, takes the time to understand your business’s unique issues and recommends a solution that achieves the best possible outcome.
“It’s also crucial for company directors to be aware of their responsibilities. While it might not be your fault that your business is in trouble it is your responsibility, Morelli added. “It’s your responsibility to gather all the available information to them make an informed decision – no matter what situation the business is facing.”
