The Chartered Accountants Australia + New Zealand have compiled a checklist for small businesses impacted by natural disasters.

Here are some practical issues small business operators should consider:

1. Are you OK?

  • Running a business is stressful enough without Mother Nature’s interference.

  • Reach out to family, friends, advisers and local support groups.

2. Engage with your workers – you’ll be heartened by their support

  • Be upfront about the impact of the disaster on your business.

  • Check employment and contractor agreements. Can unutilised employees agree to reduced hours, bring forward annual leave plans or take unpaid leave if the business is temporarily closed or in re-start mode? Legal advice may be needed.

  • Fringe Benefits Tax concessions may apply for emergency benefits to employees.

  • Challenge your workforce with diverse tasks to get the business up and running.

3. Secure business records, obtaining replacement records if necessary

  • Get your business technology up and running again as quickly as you can.

4. Insurance

  • Check current policies for coverage.

  • Collate details of losses (photographic evidence helps).

  • Engage with your insurers.

  • Seek a 2nd opinion on proposed payouts.

5. Government emergency grants and community support funds

6. Trading stock, equipment and buildings

  • For insurance, government assistance and tax deduction purposes, keep records of damaged, lost or destroyed trading stock (even if sold for reduced prices), equipment and business buildings.

  • Replacement equipment costing less than $30,000 attracts a 100% tax write-off (note: this threshold will end on 30 June 2020).

7. Repairs, clean-up costs, temporary storage costs etc

  • For insurance, government assistance and tax deduction purposes, keep records

  • Tax deductions apply to repairs, not improvements (there’s a difference).

8. Do you operate from leased business premises?

  • Engage with your landlord on possible rent relief and the timeframe for any necessary repairs to be done.

9. Your suppliers

  • Review purchase agreements to determine rights and obligations of both parties.

  • Speak to them. Will they accept delayed payment terms?

  • How quickly can they re-supply what’s needed to re-start business operations?

10. Your customers

  • Review sale agreements to determine rights and obligations of both parties.

  • Develop and implement a communication strategy that conveys your re-start plans and how you’ll help them as they too recover from the disaster.

  • Can customers bring forward payment of any amounts owed to your business?

  • Enlist customer support as you re-start business (e.g. sales campaigns).

11. Revise business cash flow and business forecasts for the current financial year and subsequent years

  • Be realistic and conservative in your estimates.

  • Specialist business turn-around advice may be a good investment.

12. Tax

  • Engage with the ATO and State & Territory tax authorities.

  • Work with your accountant to see if any favourable tax adjustments can be made in your next BAS and tax return. Lodgment extensions are available.

  • Seek deferred tax payment plans if necessary.

  • In serious hardship cases, tax debt waiver may be available.

13. Finance

  • Quantify any additional financing needed to re-start business operations and explore financing options.

  • Engage with existing financiers and discuss your business recovery plans.

  • Seek a temporary break on interest repayments if necessary.

14. Learn from this

  • What went well in responding to the disaster? What could have been done better?

  • For the longer term, should a business continuity plan be prepared?

Download this fire impacted small business checklist as a PDF here.

For more information, please contact David Howells, on 02 4455 5333.