The outbreak of COVID-19 and its current and potential implications have really hit home in New Zealand over the past few days, along with the ongoing extreme weather conditions and the declaration of a drought over the majority of New Zealand. The situation is evolving daily, and uncertainty is high which leads to anxiety and stress – at both a business and personal level.
The most important thing is to remain calm, remember that we are all in this together and to keep discussing and moving forward with practical steps to support your business and families. We are here to help and are open for any discussions you need to have around your own personal situation. We will not charge for an initial consultation around your specific needs.
The big question we are being asked is what does this mean for me, the what if's:
As expected no one has all the answers, but it is worth stepping back and looking at the big picture, and focusing on what you can control. A number of business have been through many adverse events, the GFC, droughts, localised downturns, SAR’s, 9/11 in the past however there has been a longer period between a major adverse world event, and for some businesses this will be new ground.
Some practical things you can be thinking about right now:
Take this seriously, but don’t panic:
The fact that so many governments and central banks are taking such extreme measures in response to this demonstrates the level of threat that exists. A lot of people (and the media) can use this to drive towards hysteria and panic. This is neither helpful nor proactive.
You do need to take this seriously, focus on solid facts and evidence to get together a clear but flexible plan and then take the appropriate actions.
Keep informed and up to date:
There is a lot of good information available online and this information is changing as the situation evolves. It is a good idea to stay informed and regularly check in with the latest developments and advice.
If your feeling nervous so will your staff, have honest and clear discussions with them, make yourself and your staff aware of the everyone’s obligations and requirements.
Key websites are as follows:
Ministry of Health Website - Click here
Ministry of Business, Innovation and Employment - Click here
Government Wage Subsidy and Leave Payment - Click here
Know what’s important:
You need to understand what processes and systems are critical in order to continue operations and what resources are needed for these. You should consider people, inputs, plant, technology and finance.
You also need to know what systems and processes can be suspended temporarily and have a plan for actioning this if and when required.
Take stock of your businesses current position:
- Cash on hand
- Stock on hand.
- Accounts receivable and payable.
- Review cashflows and re-forecast.
Be proactive, make contact if you are going to struggle to pay or have receivables that are beyond your normal payment terms.
If you normally do work for someone, or graze stock, check in with them to see if the plan is still the same or if you need to amend. This is better than waiting until the planned time and finding out the work or grazing is not going to go ahead, as time will allow you to make further decisions and create an alternative plan.
Plan and Communicate:
The old saying of a problem shared is a problem halved is not too far off the mark. Make sure you talk with your business partners and life partner.
Talk to your professionals, don’t hesitate to ring us if you want to discuss and work through scenarios and plans.
We can also assist you with any options available through IRD for tax relief.
A number of other industry bodies have good information to help through adverse times, such as:
Stay on top of your finances: Check in with your bank, advise them of any changes within your business, ask them if they have any packages in relation to the Drought or COVID-19 that may be applicable. We understand these can include principal suspension, cashflow support, waiving of restructuring fees, etc. Above all it is important to keep talking and be open during this challenging time and look after yourselves and look out for others. The team at BM Accounting are readily available to sit down and help you map your financials and cash flows, develop your business continuality plan, run scenario testing to keep you informed, and maintain communication with capital providers and other interested parties such as the IRD. We are here to help!