Software and data to unlock smoother EOFY in the Covid-19 economy
22 April 2020, Written by Business News Australia
Putting end of financial year (EOFY) affairs in order is challenging at the best of times, but the impact of Covid-19 has thrown up unforeseen distractions that make the task much tougher than usual.
Whether it be how to access stimulus measures, protecting the mental health of staff in a work from home (WFH) environment, or existential issues around business models and strategy, there is a bumpy road ahead over the coming months.
To overcome all these issues, having creditable data on hand and software that supports it could make all the difference.
This is the view of Institute of Certified Bookkeepers (ICB) CEO Amanda Linton (pictured), who says the situation is "forcing the hand" of many businesses to expedite their online plans.
Meanwhile, others need to at least arm themselves with better information to improve their chances of success, or indeed survival.
"By the time we reach 30 June, perhaps more than ever, it's going to be critical that businesses are working with the best data to be able to look at the real impacts the crisis has had on their business," says Linton.
"The challenge that you've got right now is you have a community of business owners whose stress levels are very high, so there's a fine line between that and changing a process so they can get creditable data, which is the key win that we want to see.
"On the other hand, for businesses that are currently in shutdown now would be a perfect time to look at getting more information into play and up-to-date, and that's not just financial data; it's tracking stock histories, sales, who the biggest customers are and a lot more."
Empowered strategy through software
The ICB has a long-term relationship with software provider MYOB, which Linton says not only provides the technology needed to manage data but also a professional partner community that is engaged and able to help with issues ranging from HR to the latest stimulus packages.
"Companies like MYOB have solutions that enable a business owner to stay very up-to-date, and stay connected with a registered partner who can actually help them through this," she says.
Linton mentions a business she is associated with that uses MYOB, which as a food manufacturer and retail outlet was faced with some tough questions when the shutdowns began.
"They were asking whether they had to close, what the impact of that would be and whether they should move into online sales," she says.
"Because they were able to pull information together in a real-time scenario including payroll, the amount of hours employees worked, and the breakdown of offline versus online retail sales, they were able to put a solid strategy in place and accurately predict what their sales were going to be."
The result was that partner brought their online sales framework forward by 12 months.
"They had always planned on going to online sales, but because they had good data to work with and knew what they could do, that actually saved them over the Easter period because they're a confectionery manufacturer so Easter is a big time of year for the business.
"Our members have dozens of those kinds of stories where having up-to-date data just means they can react quickly and they can be more flexible, rather than saying "I have to wait three weeks for my data to be updated and then I make a decision", which for a lot of businesses - especially in this environment - is just too late.
"The world's just never going to be the same beyond Covid-19. I think we're going to have a lot of businesses who have now found ways to work in an online environment that they hadn't considered before, so their hand has been forced to a certain extent."
The biggest concerns in the face of Covid-19
Linton believes there is no point in businesses trying to go it alone and gathering all the information themselves during this time, and recommends teaming up with a qualified advisor like a certified bookkeeper.
Engaging with MYOB also means business owners can talk to a member of their team over the phone rather than having to be on the end of a chat or an email, and the more protracted and impersonal form of communication it implies.
The bookkeeper has been busy lately with webinars to field questions about the pandemic's implications for bookkeeping and a range of business functions.
"Most of the uncertainty that our support lines are hearing about at the moment isn't around the social distancing measures, but more around what stimulus can they access and how much stimulus are they entitled to, not only for their staff but also for many of them themselves," she says.
"Most appear to know where to go to get access or register interest for JobKeeper, but as we move into preparing BAS for the March quarter, how they activate some of the other economic stimulus relief measures aren't so clear - for example PAYG Withholding Credits and PAYG Instalment refunds.
"We have a significant number of businesses in Australia that are sole traders and/or family-based businesses, so they don't have the clear-cut lines of definition of being employees."
On this matter, Linton emphasises the self-employed can access the same money or initiative so long as they demonstrate they have the 30 per cent turnover reduction in comparison to the same period for last year.
"They are absolutely are entitled to that - it's the same as business owners who are operating inside a company structure.
"If you have a situation where you have a sole director who is only paid once a year, as long as you can show that the director is the person who's generating the income for the company, that one director would be entitled to JobKeeper as well.
"I think where some of the confusion is coming from is coming from is business owners who don't necessarily understand that as a sole trader, they can't be an employee of themselves; once we have a clear line definition then it is easier to direct them to the respective stimulus measures that they have access to."
She says most businesses want to keep staff engaged in some capacity, but don't always know how.
"Given the stimulus measures are being implemented in a very short timeframe, we still don't have all the answers and software is going to play an important part in these measures.
"Single Touch Payroll is the platform for the implementation and management of the JobKeeper initiative and software companies are having to move extremely quickly to enable business access to those initiatives."
Linton also distinguishes between which employees need to receive superannuation and which don't.
"Effectively for employees that have been stood down and are not working at all, then the employer would pay the employee $1500 gross, less tax, and there would be no super payable on top of that," she clarifies.
"If however you have an employee who is still engaged and working for a certain number of hours, then the employer is still obliged to pay superannuation on the hours that the employee is actually working."
As an example, if an employee's normal hours equate to $1,000 a fortnight, the employer must pay superannuation on that but they don't have to pay it on the additional $500.
Linton also provides clarification that even if a business does not qualify for JobKeeper payments right now, if their revenue falls by 30 per cent at any point within the set period to 30 September they will then be able to apply.
"If for example an employer doesn't experience that downturn until May, they would then enter the program in May," she says.
"So it's not like if you're not eligible now you'll never be eligible for it. There is eligibility if a downturn occurs at a later date."
Mental health the "sleeping giant" in this crisis
The ICB executive explains the vast majority of employers want to do the right thing by their staff, but from an HR perspective there are challenges with finding the cash flow to make JobKeeper payments now before the government funding comes through.
Financial hardship as well as the challenges of working from home are psychologically challenging for employees and employers alike.
"The mental health aspect of all of this is I think the sleeping giant at the moment, because not only do you have business owners who have now have to deal with potentially what the longevity or the financial stability of their businesses are, but working from home for a lot of people can be quite a challenging environment," says Linton.
"It may well be that there are now children at home, parents who a re trying to work from home. You have situations where maybe domestic violence is a problem, so being effectively restricted to work from home has its challenges as well.
"I know as a previous small business owner that one of the things that goes through your mind, particularly when you're in that micro and family business environment, is your staff become your family."
She says in these circumstances employers tend to put themselves last.
"This means there's a very real risk that they'll push their business beyond the bounds of commercial reality, just so they don't have to lay people off," she says.
"So that's something that weighs very, very heavily on the mind of employers."
This adds to what Linton describes as an "extremely complex" HR framework in Australia that often leaves employers inadvertently tripping themselves up despite the best intentions.
"So my number one suggestion to any business owner if they're looking at potentially standing staff down, reducing staff hours, or changing the way they engage with employees, is to get themselves attached to an HR advisor who can actually help them through this process.
But what about the extra cost, especially for companies that are doing it tough?
Linton emphasises a lot of companies may already be connected to HR advisors through third-party arrangements.
"For example, all of the certified bookkeepers that are our members have access to an HR provider at no cost for a limited fair use policy framework," she says.
"If you have a business that already has a certified bookkeeper engaged, talk to your bookkeeper, they may already have access to some of this information."
This story was written in partnership with MYOB.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Author: Business News Australia