News | Gadens on hand to assist businesses facing COVID-19 challenges

Gadens is ‘open for business’ and on hand to help businesses face the challenges associated with COVID-19, reminding businesses that ‘Cash is King’ and to protect and improve cash flow in order to survive.

The economic impact of the COVID-19 outbreak is increasing, and Australia is facing unprecedented challenges related to the coronavirus and the Government responses geared toward containing the spread of the virus. In these uncertain times, businesses need to be flexible and adapt their practices.

Commenting on the current issues, partner Patrick Walsh said: “The key to cash flow is the lag between money out and money in. In these uncertain times, businesses must take care to protect and manage their cash flow. External pressures caused by the COVID-19 outbreak are already impacting cash flow for businesses across Australia, but there are simple strategies that can be employed by businesses to manage their cash during this critical time.”

Gadens is working to support clients, both existing and new, by providing complimentary ‘health checks’ in order help identify the strengths, weaknesses, opportunities and threats for business. The firm is advising clients to take measures to control expenses, such as implementing a rolling forecast or budget, requesting quotes for major expense items (to avoid unnecessary surprises), seeking fixed costs where possible, and engage with business partners, staff and even family to see if there are areas where expenses can be cut.

Managing the timing of cash outflows is where businesses have greater control in managing overall cash flows. There are several ways cash outflow can be brought under control, including taking advantage of credit terms, negotiating discounts on invoices for paying upfront, and contacting suppliers early to see if an extension to payment terms or a payment plan might be possible.

Businesses can also take steps in regard to upcoming tax obligations. Patrick Walsh noted: “We are urging clients to review their upcoming tax obligations, taking into account any opportunities to reduce PAYG payable, or to see if they are eligible for any tax incentives that the Federal Government recently announced under its second economic stimulus package in response to the coronavirus pandemic. It’s vitally important that businesses consider and use those elements of the economic stimulus package that suit their business at this time.”

During this COVID-19 outbreak, there is increasing reluctance for businesses and people to part with their cash so managing debtors has never been so crucial. Gadens has a unique debt recovery offering for businesses to help manage and collect outstanding debtors, utilising a specialist commercial account debt recovery company, National Recovery Service (NRS). Additionally, the firm provides a conventional engagement structure which can accommodate for ‘fixed fee’ arrangements in order to assist businesses. Gadens also provides clients access to a proprietary web-based recovery management and reporting system – eDebtRecovery – which reduces unnecessary costs, stores all communication and documents related to the matter, and reduces end-of-month processing time.

Patrick Walsh added: “Companies must work now to control expenses and manage the timing of cash outflows, while also effectively managing debtors. We are providing advice to a range of clients and our specialist teams can assist your business whether the issue is corporate, property, banking, insolvency, IP or employment related.”

For details of all our COVID-19 tips and updates, visit the Gadens COVID-19 Hub.