End Of Financial Year

Whilst there is no shortage of news at the present time with pandemic, racial inequality protests, stimulus payments and talk of the RBA going below zero with interest rates, there are still some annual matters for business owners and families to check off in the month of June.

The first thing is a quick run around the financial block. Where are we tracking? What actions if any need to be addressed in the run in to June 30? Are we up to date with creditors and tax office obligations generally? Is our budget signed off for financial control purposes? Have timing differences been analysed and understood? Have we reviewed our risk management plan and updated our risk register for emerging risks through the crisis including counter party risk where applicable? Should we be putting in PPSR entries for larger dollar amounts? Have we taken advantage of assistance packages that are available to us including state government packages, financier offerings, ATO concessions and other "goodies" that are temporary in nature?

Once these items have been addressed, the gaze rises to what ideal tax rate we want to pay for those not in a company structure and managing ourselves to fit within the range. Upper end of the range if lucky enough not to be adversely impacted at the present time. Trying to get to the bottom end of the range if impacted more directly. At the business survival end of the spectrum, have we been nimble in re imagining our model to get to the other side of all this whenever that will be?

It is unlikely that everything will go back to normal as if events of the past few months never occurred. Permanent change can and will occur. Futurists are skilled at looking past the present to a probability driven view of the future. Opportunity exists for those who are able to foresee it.

We often say that no matter what business you are in, you are in the people business. This has been unfortunately drilled into me again in the past week with a tragically untimely and preventable death of a minor in our broad circle. Reading about 45% of Australians experiencing mental health difficulties and actually experiencing the tragedy of waking up to news that a teammate of your kids in junior sport is no longer with us are two profoundly different things. I can't even imagine how the family concerned find the strength to go on. There is so much more to life than business, finance and taxation.

Please do give your loved ones a cuddle and catch them doing well. It costs nothing to recognize a coworker or business associate doing a really good job. Life is so fragile sometimes. It appears we live in a throwaway society at times. That life itself can be thrown away is devastating to those who remain. Doubling down on healthy habits and well being will give those in difficulty the best chance of recovery. Humility will give those lucky enough to be in good times the best chance of maximizing them. As a friend and advisor treat each equally. So often luck itself plays a part in which side of the coin you are on.

Beware the hand that provides cheap and easy money. It will want to be repaid and that time will come. Victoria's premier Daniel Andrews is fond of saying things in press conferences to prepare the ground and then suggest the time for that conversation is not today. This line of thinking about government deficit, debt and handouts is on that basis. It will come home to roost, but not today. Planning for that time means either positioning asset growth where opportunity presents utilizing cheap debt and/or retiring debt where possible to build resilience for judgement day when it comes. Sensitivity planning in a budgeting sense has never been more important. Prepare for the worst and treat upside as a bonus.

Finally, as my sister (who is the smart one in the family) said to me last night, there is a lot that is crazy at the moment but there is lots of good too. The fundamentals of resilience and positive psychology will pay off. The fundamentals of positive cash flow and living within your means will work again. Using ratio's to determine the portion of funds to go to tax, capital reinvestment and family consumption is timeless. That - and never take playing community sport for granted ever again!

Stay safe everyone.