Cash Flow Post JobKeeper support
Jul 21, 2020
What will happen to your business when JobKeeper payments cease?
Payments are due to continue to end of September. There may be a change in the eligibility requirements that requires a re-set of eligibility before then.
Then there is the question of whether it will continue beyond that date and whether that will be industry specific rather than all types of business.
No matter what the circumstances, the fact remains that JobKeeper won’t be here forever.
Making JobKeeper work for you
The key to maintaining your cash flow is making the JobKeeper payments work for you. Check how much of your fortnightly wages bill is being funded by JobKeeper. Then consider whether the JobKeeper payment is freeing up cash flow in your business. It may be only a small amount. If possible, try and put some funds aside to help with your cashflow post JobKeeper support.
One of the ways to get value from JobKeeper is to find ways to keep your staff productive, whether that is in writing job procedures, undertaking training, brainstorming together to find areas and ways to improve your business, new services, better customer service, opening communication and so on.
If you think about it, you’ll find plenty of ways to get value from your employees even if your business has been forced to shutdown.
How will you cope post JobKeeper?
Planning in advance is the best way I know to mitigate stress levels about future cash flow. For those businesses that haven’t been locked down and forced to shut their doors, business is continuing, albeit not at the same levels as pre Covid. Others are having their best months with business continuing to grow.
But assuming your business has been impacted and the JobKeeper is helping to pay the wages of your staff, what can you do now to help to build the business to a level of revenue that can support you paying your staff 100% of their wages without JobKeeper and without having to let anyone go?
At most, you’ve got three more months of support. It’s time to think about your ongoing cash flow and implement your future revenue plans now. I’ve no doubt that over the past few months, you’ve pared back all non-essential costs. The way to move forward to to increase revenue and keep a tight rein on costs of sales or delivery and expenses generally.
Make sure that you’re making a profit on everything you sell. If you’re selling time, make sure that the costs of your team in providing the service are recovered and there is a good margin to help to pay the overhead costs.
JobKeeper and government support for business will stop at some point. Be prepared with a cash flow forecast and a revenue plan so you know what needs to be done. This will provide the framework to cope post JobKeeper support.