Bushfires. Corona. Tax time. Your guide to surviving tough times as a business owner.
Staying at home is the way we are going to beat Coronavirus, but how exactly do you, your business (and your finances) survive this pandemic?
There are a multitude of things to consider, but in the end it all comes down to knowing your business, your cash flow and what to do come tax time. Let’s dive in.
Knowing your business
Step 1: Time for a business health check
- What does COVID-19 mean for your business? Check out this informational blog we wrote on some of the support options available to small businesses and sole traders during COVID-19. This article also shares how to win business during slow economic times such as the present.
- Do you have any big payments coming up that could put you into trouble?
- Do you have any invoices or contracts that you expect to be paid soon?
- Are there invoices that should have been paid that you need to follow up?
- Keep your business and personal finances separate. This is essential to understanding your business’ specific income, expenses and cash.
*Tip* Use Sole App to easily see and forecast what the heck is going on with your business. Download Sole App on the App Store (Accounting Made Easy – SOLE) or Google Play (Sole – Accounting & Invoicing Made Easy) and start your 30-day free trial to test it out for yourself. Or check out our range of Sole App Sole Trader and Freelancer Accounting Features designed to make your life easier and your accounting simplified.
Cash flows
Basically, cash flow means how much cash you have available to use if you needed to pay your loans, employees, etc. If you can’t do these things, you can’t run your business!
There are four simple steps you can follow to make sure your cash flow is healthy:
- You may qualify for government grants. Check out the Australian Government and relevant State / Territory Government websites to see what you may be able to claim.
- Get your invoicing done in a correct and timely manner (i.e. straight away, ASAP!)
- Can you ask for a deposit, or a milestone/part-way payment to get some cash through the door?
- Try to implement a clever and polite invoicing strategy, but if this isn’t working, try taking some formal action (remember that Sole Accounting App will do the invoice tracking and send you reminders to follow up).
- Sole App will not only do all the tracking of invoices for you, but it will also enable you to send professional invoices from your phone with a click of a button.
- Keep your accounting in tip-top shape (i.e. accurate and up to date)
- This is the best way for you to see your business’ financial wellbeing. (See below for a Sole special offer *.)
- If you don’t match your incomes and expenses, you won’t know how your business is going. Knowing is half the battle won!
- Keeping it simple is normally the best approach, so grab a beer, click a few buttons on your phone and let Sole do all the tracking and forecasting for you.
- Once you have figured out a way to get some money through the door, make sure you have a cash cushion where you can manage unexpected events
- To be able to fight the COVID-19 crisis, your business will need to do this from a position of strength. Is there a way you can build a buffer in the short term by picking up that one extra job over the weekend, paying yourself less over the next few months or reducing your terms of payment to get cash coming in faster?
Tax time
Tax time is going to be key for all small businesses this year. It is make or break and we will need to make sure you are ready.
- There are additional complexities this year due to the government’s support payment structures and changing working arrangements (e.g. working from home).
- You don’t want to spend too much on a tax accountant, so you should use software such as Sole to get ready for tax time.
- Maximise your deductions through a simple to use expense tracker (Sole has one built in) so that you don’t risk losing that invoice!
Give Sole Accounting App a try!
We want you to feel confident and help build your business. To help get you on the right track, Sole Accounting App will be free for your first month.
As a bonus, if you want our CA certified accountants to have a look at your business and finances before tax time, sign up for free and give us a bell (leave your name, number and email) at mybusiness@soleapp.com.au and we will be in touch.
Note: Any advice or commentary in this blog is general advice and requires validation from a registered accountant to make sure it is appropriate for you.