The concept of Budgets and Cash-flow estimates for 2020-21 looms large as we adapt to our new “normal”. The idea that we look at 2019-20 results and adjust up or down is not logical as we approach the end of the financial year dominated by the Social and Economic fallout of a Global Pandemic that basically stopped the world in its tracks.
We need to consider the following issues in our Budgeting Process:
- Has our Market altered in terms of Revenue opportunities?
- What operational changes have we made to our business:
- Staff Reductions
- Working from Home
- Cost of Business Premises/Leasing
- Business Travel
- What Costs have changed in the last six months
- Petrol and Fuel
- Power and Utilities
- Finance Costs
In terms of Cash-Flow forecasting there are a significant number of Government incentives you need to consider.
- Job-Keeper and its potential finish.
- Finance assistance from lending institutions
- Rent Holidays
- Community or Industry support packages
- Insolvency safety-nets
- Apprentice/Trainee Support packages
- Cash-flow boost payments
The ATO has also introduced several initiatives to assist Business and Employers and reduce their Tax commitments and assist them with their cash flow.
- Instant Asset write-off and accelerated depreciation
- Changing or deferring GST payments.
- Changing or deferring PAYG instalments
- Deferring Superannuation Guarantee payments
- Deferring outstanding Tax obligations
- Deferring Lodgement deadlines.
All these issues effect both our suppliers and clients, thus trading terms may alter as follows:
- Accelerated payments from Government Agencies
- Delayed payments from business customers.
- Re-vamped supplier terms and conditions
At Davidsons we believe Budgeting and Cashflow forecasts have become even more important as we deal with our new World.
For more information on understanding Budgets and developing cash-flow forecast contact your Davidsons Team Member or email us at firstname.lastname@example.org. Or call us on 03 52216399.
Disclaimer: this information is of a general nature and should not be viewed as representing financial advice. Users of this information are encouraged to seek further advice if they are unclear as to the meaning of anything contained in this article. Davidsons accepts no responsibility for any loss suffered as a result of any party using or relying on this article.