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9-point checklist for flood-affected firms
An Australian accounting body has developed a financial checklist aimed at small businesses across the east coast, including boutique law firms, suffering significant damage and revenue loss off the back of the recent floods.
Emma Musgrave
The new checklist released by Chartered Accountants Australia and New Zealand (CA ANZ) comes as the Insurance Council of Australia reports more than 17,000 insurance claims have already been lodged as a result of the flooding and severe weather in NSW and Queensland.
In developing the checklist, CA ANZ tax leader Michael Croker said small businesses are vital to Australia’s economy, and when natural disasters strike, the effects are felt quickly by the business owner and right throughout the communities where they operate.
“Many small businesses are still battling the impacts of COVID-19, the end of JobKeeper, and to be hit with flood damage is devastating,” Mr Croker said.
The CA ANZ checklist for flood-affected businesses
- Look after yourself, your family and your staff
“Many chartered accountants have been trained in providing mental health support to our clients, but also ensure you reach out to family, friends, advisers and local support groups as well.”
Mental health training is going to be boosted even further in 2021, with up to 5,000 accountants to receive further mental health training this year.
- Secure business records
“By taking a proactive approach, you can prevent the loss of important business records and avoid the need for natural disaster document recovery,” he said.
“Making digital copies is a key way of securing business records. Businesses should consider scanning their vital documents with an online secure cloud storage solution.
“Furthermore, businesses should regularly back up electronic documents.”
- Don’t get scammed
“Scammers take advantage of natural disasters, targeting victims of the disaster and those in the community who want to help them,” he said.
“Many people also want to donate quickly to help out, so be careful of scammers impersonating reputable organisations seeking donations.
“There are many resources designed to help Australians avoid being scammed, including Scamwatch where you can also report a suspected scam.”
- Check your insurance
“Where insurance cover is provided by the policy, business owners will need to collate details of losses. Photographic evidence will help with this.
“Natural disasters often prompt a review of future insurance needs. Before entering into a new insurance policy, get advice on the costs and benefits.”
- Government emergency grants
“Eligibility criteria and an application process apply, so [a] business may need to get help from their accountant.”
- Speak with suppliers
“Review any purchase and supply agreements to determine the rights and obligations of both parties,” he said.
“Find out if suppliers will accept delayed payment terms and how quickly they can resupply what’s needed to restart business operations.”
- Repairs, clean-up costs, temporary storage costs etc
- Revise business cash flow
“Be realistic and conservative in your estimates. It might also be a good investment to seek specialist business recovery advice,” he said.
“Business financiers will be keen to know how the flood impacts their loans and repayments. Be prepared with well-thought-out revised budget forecasts for the 2021 financial year and beyond.”
- Tax
“If there is cash available, a business could be eligible for a 100 per cent tax write-off for equipment to replace depreciating assets lost or damaged in the flood,” he said.
“Your accountant can also liaise with the ATO should extra time be needed for tax lodgements and payment of tax debts.”
Emma Musgrave
Emma Musgrave (née Ryan) is the managing editor, professional services at Momentum Media.
Emma has worked for Momentum Media since 2015, including five years spent as the editor of the company's legal brand - Lawyers Weekly. Throughout her time at Momentum, she has been responsible for breaking some of the biggest stories in corporate Australia. In addition, she has produced exclusive multimedia and event content related to the company's respective brands and audiences.
Prior to joining Momentum Media, Emma worked in breakfast radio, delivering news to the Central West region of NSW, before taking on a radio journalist role at Southern Cross Austereo, based in Townsville, North Queensland.
She holds a Bachelor of Communications (Journalism) degree from Charles Sturt University.
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