Bay accountants are "very busy" post lockdown. Photo / Getty Images
Business owners' biggest post-lockdown concerns are for their cash flow and the impact of wage subsidies coming to an end, Bay accountants say.
However, many had confidence in their team's willingness to do what it took to survive with the lockdown giving some a new outlook on future business ventures.
KPMG private enterprise partner in Tauranga, Tracy Preston-Lett, said some clients were feeling the pressure of an unpredictable outlook.
Some were constrained in terms of their financial position, exposure to an impacted industry or where their strategy was now threatened and were rethinking their short and mid-term plans.
"Others, however, have capitalised on the headspace from the enforced lockdown to consider their business post lockdown world, with a new perspective and are now activating those plans," she said.
Preston-Lett said she was seeing an increase in client base and an uptake of new engagements in cashflow work, business continuity and general advisory work.
Clients had a "mixed-bag" of needs including understanding what government support they could access and had run various webinars to address Covid-19 issues.
Business owners were feeling a range of emotions as they kick-started their businesses again, she said.
"There is a lot of unpredictable headwinds to navigate and many sit outside of their control, such as election outcomes, government support, economic outlook, global factors and credit availability.
"They're probably most confident about their own teams and the willingness of those people within the business to do what it takes to survive."
Director at Ingham Mora in Tauranga, Tom Beswick, said his team had been busy during and post lockdown mostly helping existing clients "get through".
"We have taken on 10 staff in the last three months as a result of growth so we are confident in things bouncing back."
He was aware of only a few clients who were "severely impacted" going forward but did not tend to have many retail, hospitality and tourism clients.
Beswick said clients were needing the most help with understanding government announcements so they could get what they were entitled to.
"Clients often need our help to negotiate payment plans with the IRD and also to help get them of penalties and interest for any payments they were late in making due to Covid-19.
"I think a lot of people thought the IRD was just going to write those penalties off automatically but there is nothing automatic about it."
Some were also needing help with planning for the future, he said.
"Many were hunkered down and relying on subsidies and savings to get through the lockdown."
Beswick said his clients - who were generally trades and construction businesses, orchard owners, or commercial and residential rental owners - were more emotional during the lockdown compared to now.
"Many are stressed about a post-wage subsidy environment, especially over winter," he said.
"There is a lot of uncertainty out there on what happens when wage subsidy round two expires."
While many businesses were running "full steam" now they were uncertain about what was next and whether this was a false bounce back.
"Certainly all are thankful in the area that we are still building houses and were able to pick the kiwifruit."
Beswick encouraged people to talk to an accountant as many businesses had historically relied on copying last year and that was the business plan.
"Unfortunately that won't work going forward so people need help," he said.
"The main thing I'd say is 'fly alone, die alone'. This means if you try and do it all yourself it will be very much harder.
"Your average business owner in Tauranga knows their trade really well, but there are lots who have plenty to learn about running a good business."
BDO Tauranga Ltd director Paul Manning said his clients were excited to be back trading but were nervous about what was in store for the future.
Manning said clients were needing the most help with re-setting their strategic and financial goals, financial advice and forecasting as well as credit applications for banks.
"Businesses in financial difficulty require independent advice from an experienced business turnaround specialist.
''The sooner the business owner engages with a suitable specialist, the greater the chances the business will actually survive."
Small Business Accounting Tauranga owner Megan Tomalin said the general feeling among clients post lockdown was uncertainty and stress.
"Sadly, [we] have seen a few clients whose business have been knocked out overnight as they are connected to the tourism industry," she said.
"Other clients in import or retail have severe concerns over the future viability of their business."
Tomalin said trade clients were experiencing busy times catching up after lockdown while some retail clients were thriving as people chose to spend locally instead.
"Also with the bank interest rates so low and expected to fall further, [people] may as well enjoy their cash."
Post-lockdown, Tomalin said her team had been "very busy" with clients bringing in paperwork after not being able to in alert level 1 and 2.
Tomalin said her clients included rental property owners, sole traders, partnerships and small companies and were mostly requiring their tax returns done or were seeking advice regarding new business ventures and financing.
"A lot of clients are seeking urgent financials as seeking mortgage finance, equipment finance etc.
"A lot want to know their tax situation to ensure they have funds available for tax payments."
She said there was a general feeling of uncertainty at this time.
"The worldwide situation is concerning, with Covid back in the country and the border debacles, it is adding to people's fear and uncertainty."
To help people move forward following the lockdown Tomalin advised that they review their business and check if it is sustainable and they can transform to "meet the new normal".
Chartered accountant at BWT Financial in Rotorua, Tim Wild, said most business owners were nervous about cash flow.
"But I am hearing many clients are flat out and have lots of work in front of them."
Wild said there was no increase or decrease in client numbers but existing clients were "anxious" and in phone contact much more often seeking help with subsidies, the IRD tax remission policy and cashflows.
His advice for small business owners post lockdown was to be in regular contact with customers who owe money and review unnecessary spending.
Maria Palmer, at Absolute Accounting in Rotorua, said uncertainty still existed among clients post lockdown but less so than during the initial phase of the crisis.
Palmer said many clients were in hibernation until tourism picked up again and a few "start-ups".
"People [are] choosing to go into business as a result of losing their jobs or changing in direction."
Clients were needing most help with determining their financial health and position, evaluating the effectiveness of their business operations and establishing a plan moving forward.
Palmer said not being able to generate income, pay their bills and keep staff on was what clients were fearing the most.
"Morale is lower as they are worried about cash flow, the future of their business and their employees," she said.
But, she said, clients were most confident about their core business offerings, what they are good at and why they went into business.
Her advice to help people move forward post lockdown was to look at their business opportunities and strengths, focus on customer engagement and be proactive, not reactionary. "Plan, plan, plan".
KPMG - Tauranga
1. Seek advice
2. Never waste a crisis
3. Don't ignore reality
4. Have a plan
BDO Tauranga Ltd
1. Understand your cash requirements and look for opportunities in this volatile environment.
2. Insist on commercial advice from your chartered accountant – not just tax advice
Small Business Accounting Tauranga
1. Don't bury your head in the sand.
2. Taxes don't go away.
3. Consult with your accountant.
4. Set a realistic forecast of the next 12 months, two and five years.
5. Factor in different what ifs scenarios. Your accountant can help with these.
Ingham Mora - Tauranga
1. Keep the bank/IRD/creditors onside through good communication. If you're going to struggle to pay something then tell the person before you pay late. Most people will work with you but going to ground and burying your head in the sand creates uncertainty and nothing good comes of that.
2. Know where your business stands today and have a view on where it will be in 30, 60, 90 days with a good quality forecast. If you don't have the skills to do this work talk to your accountant and get them to teach you.
3. Enter all your bills into your accounting system so you can always know where you stand and what money is owed when.
4. Know your credit terms and if you can get paid sooner, do so. Be careful who you offer credit to. You don't have to offer 50 days interest-free credit.
Small Business Accounting Tauranga
1. Utilise cloud-based accounting software – SBA exclusively uses Xero – this enables you to look at 'real time' results
2. Consult with your accountant
3. Check govt support packages or ask your accountant about these
4. Ask for help – your accountant, IRD etc if struggling
5. Basic – keep your accounting records
The council has also been served with judicial review proceedings.