Cash flow has never been so important, according to a chartered accountant.
Palfreyman Chartered Accountants’ principal, Simone Palfreyman, has highlighted that with restrictions of COVID-19 likely to continue for many months, individuals and businesses alike should be focusing on the creation of cash flow forecasts.
Ms Palfreyman has previously highlighted that the most common question she is hearing from her clients during COVID-19 is, “Can you help?”
For individuals: “They need to consider how long they can survive on pay reductions and what alternatives they have to supplement that wage reduction,” the accountant indicated.
This could include the JobSeeker or JobKeeper payments, early access to super, rent reductions or using mortgage hardship entitlements, she outlined.
Ms Palfreyman extended this notion to businesses: “I believe that all businesses should be preparing cash flow forecasts to consider the alternatives of revenue reductions, government cash flow incentives and available resources.”
They should be considering any possible rent concessions, trade payment extensions and options for alternative suppliers.
Regardless of the cash flow forecast’s purpose, Ms Palfreyman highlighted that it’s an area in which accountants are willing and able to lend a hand.
“Many people are not aware that accountants can assist in preparing cash flow forecasts, providing advice on employment obligations and assist as a go-between in negotiations between employers, employees, suppliers and government bodies.”
Not only can they provide advice on available government incentives and assist clients in applying for those concessions, but accountants can also negotiate payment plans with the ATO on their clients’ behalf and request remission of penalties and interest.
“Clients need more assistance than ever in navigating the new COVID-19 environment, [especially where] the legislation and government stimulus opportunities are changing on a daily basis,” she said.