Five months post initial lock down it is has become clear that business now is very different than it was pre-COVID-19, and we’re still far from understanding what the new norm is.
We approached the initial phase of the pandemic-lead crisis as if we were to take the 6 weeks of ‘medicine’ that the return to what was normal would be waiting for us. This bubble was burst prior to the end of that six-week period by; Europe, UK, America and then Singapore seeing how difficult the Virus was to control.
The recovery is likely to be slow and protracted, and with the recent second lock downs in Melbourne and Auckland, we are seeing first-hand the economic impacts following the public health policies enforced.
The chart below depicting the number of COVID-19 cases could be the wave effect scenario that we need to be prepared for over the next two years, and potentially longer.
Scenario planning is vital for all organisations and it is recommended that shareholders, directors and executive teams work closely together to define a number of scenarios and run financial forecasts alongside each.
The above scenarios will have direct impacts on the balance sheets of every organisation. Presently in Australia most businesses have elected to defer the payment of taxes in favour of preserving cash for the extreme uncertainties that are faced by most businesses. At some point the Australian Taxation Office and other regulatory bodies will need to commence collecting the taxes owed.
In considering how to preserve cash reserves and to optimise your working capital, have you considered an approach to the repayment of the deferred liabilities currently recorded in your balance sheet?
As the stimulus packages draw to a close and the moratoriums that are currently in place expire; it is now time to consider the next phase of managing your organisation through a protracted COVID19 scenario.
Should you wish to discuss your working capital scenario planning and what is achievable in respect of tax plan arrangements, get in touch with our friends at 888X (email@example.com) to receive an obligation free initial assessment.
To find out more on improving your immediate cash flow, be sure to get in touch with us today to discuss how ScotPac can help.