It’s finally December and time to reflect upon the year at a personal level. It’s also an opportune time for staff to make a self-assessment of performance for the last 6 months and to sit down with their manager/director for some feedback on what has been done and to discuss what goals should be set for the year ahead.
They say that what you fail to measure and set benchmarks/KPIs for will not change. Well, not for the better anyway! Of course, that is true of all performance – staff results, customer service and profitability.
Like driving a truck down a highway, some distractions are inevitable and will cause the driver to slow down – a cheeky mobile call with a friend or being so focused on the upcoming exit lane and the rest of the journey that the speed drops to 80 in the 100 zones. How often do we see that?
Business owners and managers are only human and can get distracted by the volume of correspondence, calls, meetings and other tasks which collectively soak up their days while aiming to meet client/customer needs. It’s not surprising then that financial difficulty creeps up in the businesses we ultimately see and even more so once personal/family issues weigh-in for business proprietors.
Financial support from the Government through COVID cash flow boost, Jobkeeper, Jobmaker and Homebuilder programs and for those businesses that could/can access capital, instant asset write-off and temporary full expensing, have gone a long way to grow the Australian economy out of the June 2020 recession that at times seems long forgotten.
Get Ahead of the 8 Ball
Just as the Federal Government has been weaning us off financial stimulus (carrot), there is a post-election debt collection campaign (stick) lurking in the background.
Since April 2020, the ATO collection processes have been turned off which has been great to see businesses survive some really tough financial times (lockdowns) while other businesses have virtually been “on steroids” riding a wave of stimulus success. But even for the building industry, high volumes of work have caused a high demand for trades and subcontractors and in turn, overheated prices for certain goods and services – a recipe for financial trouble if business managers and owners are not maintaining strong financial controls/discipline.
Relationship bankers will be a good “check-in” point for some businesses, getting a sanity check on business performance, be that compared to industry trends and otherwise against statutory obligation compliance.
For others, perhaps with less substantial banking facilities, their accountant will be the check-in point for BAS compliance and hopefully engage in conversations around the 3-12 month cash flow forecasts for the business.
Now is the Time to Engage with The ATO
The ATO has told us that notices including warning letters and Director Penalty Notices are in the immediate pipeline, so be on the lookout for these and in the meantime make sure director home addresses are correctly recorded with ASIC.
While obtaining court judgments, winding-up orders and court-ordered bankruptcies are not expected until the middle of the 2022 calendar year, there is potentially a once-in-a-lifetime opportunity right now to negotiate outcomes with the ATO while they are in support mode and have even used the words “supporting an exit with dignity”.
Article was written by Malcolm Field (Director) – SV Partners Perth