If your business has been impacted by the recent weather events, it is important you understand what support and resources are available to you and what potential risks and challenges you may encounter while getting back to business. Here we provide high level tips and information on managing your finances, insurance fundamentals for business, understanding your employment law obligations and tax assistance.
Managing your finances
Cash flow is the lifeblood of any business and ensuring you have sufficient cash to continue to operate after a crisis will be critical to any recovery
Take a scenario-based approach to forecasting cash flow. Include some potential "worst case" scenarios and consider how you'll respond to these scenarios
Consider all resources available to you to preserve and maximise cash, including cost reduction, sale of non-core assets and support from key stakeholders (e.g. lenders, suppliers, IRD, landlords etc)
If you can’t meet your debts as they fall due, don’t ignore it. Have a conversation with professional advisors to identify options - the earlier you act, the more options you will have available
Document your decision making around trading. Don't take illegitimate risks that are likely to create losses for your creditors - always consider your responsibilities if you are a director
Insurance fundamentals for business
Understand your business interruption policy in detail and know what you are entitled to
Lodge your claim early, request a progress claim (access critical cash) and then take the time to complete your claim thoroughly
Seek professional support from an advisor - they can help prepare your claim and act as your advocate with the insurance underwriter and their loss adjusters - your broker should also be a helpful advocate
You may be able to claim under your business interruption insurance policy even if you have not had any direct material/physical damage
Employment law issues
Avoid making knee-jerk decisions in response to employment relations issues caused by business interruption
Obtaining employee agreement is always the most effective way of mitigating downstream legal liability
Good faith consultation and engagement with employees should guide any action taken that might affect employees
Don’t ignore health and safety issues, including the impact on mental wellbeing
Tax issues
If your business has been significantly impacted by the recent weather events, understand what measures from Inland Revenue are available to you
Work through any additional expenses incurred through repair and recovery and understand what is tax deductible, eligible for tax depreciation or you can claim tax losses for
Check if you have overpaid provisional tax and request a refund to support cash flow
Consider tax pooling as a cheaper way of financing any tax that needs to be paid
