COVID-19 and Private Businesses

Here to support you

Growing a business can be demanding, exhilarating, and intensely personal - that means that managing a crisis like COVID-19 can be particularly challenging for private businesses. 

We get that. That’s why we’re here to help you in a way that fits the needs of your business. At PwC, we’re built around you. Our people are 100% dedicated to working with private businesses like yours. Our focus is on how you can prepare, respond, recover and create value in the face of COVID-19.

We’re here to listen, today and tomorrow.

Your road to recovery

 

Preparing and Responding

As your business is responding to COVID-19, see the key areas you should be addressing.
Recovering and Creating Value

As your business moves from crisis management to stabilisation and recovery see the key areas and levers you need to focus on.

Your short term cash flow

As you deal with COVID-19 it's important to focus on your cash position. 

What you need to do:

  • Prepare a cash flow forecast to help identify potential funding needs and assist in your discussions with your financiers, suppliers and other stakeholders.

 

 

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Your eligibility for Government support

Has your business accessed the Government support available?

ATO and Federal government

The ATO is offering various support measures to support businesses including payment deferrals and remission of interest and penalties.
Refer to their website for more information and consult your tax agent and accountant.

State Revenue offices

State Revenue Offices are offering various payroll tax and other support measures to businesseses. These measures are not harmonised and you should consult your tax agent for further details.

State based support and grants have become available in recent weeks so if you applied for assistance a few weeks ago there may be new programs you were not aware of (including bank lending programs) – it’s worthwhile to review this now.

Financiers

Preparing a cash flow forecast will help identify potential funding needs and assist in your discussions with your financier to fast track any application.

Our Guidance on tax obligations and relief for businesses affected by COVID-19 website also includes a summary table of eligibility requirements for you to quickly review stimulus measures you may qualify for.

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Your stakeholders and creditors

Given the significant uncertainty around revenue and cash collection, a sharp focus on managing and negotiating with key creditors is critical to manage timing of payments.

What you need to do:

  • Identify creditor categories (eg. landlords, ATO, financiers, employees, supliers etc.) - are their opportunities to reduce, defer, negotiate or stop incurring these liabilities?

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Communication

 

It goes without saying that during COVID-19 its ciritcal that you focus on your communication with key stakeholders to your business operations.

What you need to do:

  • Establish a communication plan to keep all key stakeholders informed of progress.

  • Maintain an action log and allocate who is responsible for tasks such as recording (and keeping files) of calls, emails, meetings with key stakeholders and what has been agreed.

  • Prepare a document covering these key issues and actions, to share with a select internal group and update this document regularly.

 

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Director obligations

There were new changes recently announced to Insolvency laws commencing on 25 March 2020.

The elements of the package (applicable for the next 6 months from enactment) are:

  • Temporary relief for directors from any personal liability for trading while insolvent – note this does not absolve directors of general duties to act reasonably and in good faith;
  • Temporary flexibility in the Corporations Act 2001 to deal with unforeseen events that arise as a result of the COVID-19 health crisis;
  • Temporary increase in the threshold at which creditors can issue a statutory demand (from $2k to $20k) and the time companies have to respond to statutory demands they receive (from 21 days to six months); and
  • Similar changes for bankruptcy (from $5k to $20k and 21 days to six months). 

Refer to this fact sheet for more information.

Additionally, the ATO may support some businesses via withholding enforcement actions including Director Penalty Notices (which apply to PAYG withholding, superannuation, and since 1 April 2020, GST amounts) and wind-ups during this period.

 

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Your liquidity and funding

Businesses need to address a looming liquidity crunch to best position themselves for the post-COVID restart.

It's time to adjust your initial focus on stabilisation and cash preservation, and turn their minds to upcoming funding needs.

What you need to do:

  • Reassess, renegotiate and/or relinquish agreements now to right size your operations for the future.

  • Deferred creditors become payable once the waiver period ends. Make sure the cash that would normally have been used to pay these creditors is not exhausted during the crisis period. 

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Your people

Keeping your workforce engaged ensures your business will be ready to drive the rebound. 

Focus to date has been on managing workforce safety and implementing government restrictions, as well as settling into new remote working arrangements.

Organisations that make decisions that are congruent with their purpose and values will keep their workforce motivated and will be best placed to rebound more quickly and effectively.

Key questions you need to consider:

  • Are you considering all of the work, health & safety aspects of bringing your people back into the workplace?

  • Are you accessing the support available? Do you have controls and governance around what is being claimed? JobKeeper and other incentives may be audited down the track.

  • What support do your leaders need to lead your workforce through the now, recovery and reboot phases

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Your strategy

COVID-19 has dramatically changed the landscape for businesses across all sectors – including significant changes that are here to stay. We need to refresh and re-align our strategic plans to the new normal, by identifying the key value drivers that have the most impact and implementing practical action plans to navigate the path back to growth and build enterprise value.

We recommend businesses use their time now to focus on the following key areas:

  • Reassess your industry’s business model
  • Update your SWOT
  • Prioritise your workforce strategy
  • Realise some quick wins
  • Quantify capital and funding needs to execute your strategy

 

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Insights

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Contact our team for support

Martina Crowley

Private Clients Business Leader, PwC Australia

+61 (3) 8603 1450

Email

Manoj Santiago

Partner, Private Clients, Greater Western Sydney, PwC Australia

+61 (2) 8266 4494

Email

Darren Jenns

Partner, Private Clients, Melbourne, PwC Australia

+61 (3) 8603 2908

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Billy Meston

Partner, Private Clients, Perth, PwC Australia

+61 (8) 9238 3320

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Chelsie Harris

Partner, Private Clients, Melbourne, PwC Australia

+61 3 8603 1231

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Glen Frost

Partner, Private Clients, Sydney, PwC Australia

+61 (2) 8266 2266

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Jade Dixon

Partner, Sydney, PwC Australia

+61 2 8266 3590

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Jason Habak

Partner, Private Clients, Sydney, Sydney, PwC Australia

+61 2 8266 2960

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Katherine Ransom

Partner, PwC Australia

3 8603 2659

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Imelda Alexopoulos

Partner, Adelaide, PwC Australia

+61 8 8218 7083

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Sophia Varelas

Partner, National Leader, Melbourne, PwC Australia

+61 3 8603 3247

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Stuart Morley

Head of Wealth, Private Clients, Melbourne, PwC Australia

+61 (3) 8603 0280

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Jason Perry

Partner, Melbourne, PwC Australia

+61 3 8603 1731

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Alan Elliott

Partner, Melbourne, PwC Australia

+61 3 8603 2378

Email

Contact us

Martina Crowley

Private Clients Business Leader, PwC Australia

Tel: +61 (3) 8603 1450

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