The spread of the Coronavirus has impacted the world so much that a large number of small and medium scale industries are under a state of pressure because they are in the lowest state of cash flow in history.
This situation can’t be eradicated so easily as the businesses across Australia are not completely aware if the plans that the government has made available for assisting the businesses across the country.
The Certified Practicing Accountant (CPA) in Australia has helped and still helping in a lot of such troubles. To make such a large group of people aware of this situation more and more people are needed by the government having completed at least an accounting internship. Then only they will be able to transfer the authentic information in simple words. They are removing all the obstacles that an employer would face. CPA has worked very effectively in making the business owners aware of the way to get funds from JobKeeper if the business is eligible for that.
As per the statement of CPA, the banks of Australia have played a major role in making SMEs aware of this situation. Having a large number of people with accounting training in an organization is necessary for coping with such situations. A large number of SMEs have cleared their doubts regarding bank loans with the help of banks. But if you take a look at this situation broadly, it has been found that there is a large number of people who are not getting any help from anywhere. The simple reason behind it is they don’t know where to go for the help that they are seeking.
As per Ana Marinkovic from National Australian Bank, this situation has become so challenging only because most of the businessmen are reducing their expenses and they are also trying to shift to the online platforms for sales. After we get the virus under control, there are some doubts about the way consumers start spending their money. It is uncertain how much time it would take for the common people to get back to their old habits of spending money.
“In the later phase when we all will get rid of this virus there are major roles that accountants will play in reshaping the business of our country (especially the small and medium-sized businesses)” said Joe Formichella (Head of Small Businesses at Bendigo Bank).
According to Joe Formichella, most of the problems of the businesses that have been affected so far can be resolved if the business owners consult the concerned accountants very early. It will give the business owners enough time to think and know about how much money they are going to get and where to go for the fund. Other things like the time required to repay that money and other things can also be made clear very easily. The demand of the time at present is to fund the small business owners until the time when the situation becomes normal.
The National Australian Bank has launched a new program called the Small Business Hub. It will primarily focus on supporting the small and middle-sized businesses that have been affected by this pandemic. It will help in the process of digitizing, and making the businesses able to sustain the loss that they have suffered so far. No matter which kind of business you have, if you have someone who has completed even a basic accounting internship program, you can easily project the situation of your business for the upcoming 6-7 months. And that would solve a lot of your problems.
The Basis for providing financial support:
There are some factors that decide whether the lender would fund some business or not. In the first place, the lender needs to know about the history of that business. The cash flow statements, balance sheets, profit and loss statements like things tell a lot about the potential of the business.
Based on this information, the lender will know about the ability of the customer and the expected time that the customer would take to repay the amount. These are the foremost essentials that matter the most for providing loans to someone.
After analyzing all these things, the lenders will see the complete forecast/projection of the business for the upcoming 12 months.
After gathering all the information mentioned above, people at the banks try to figure out whether the business owners have a genuine reason to get support or not.
The threatening situation of cash flow in the future:
According to Formichella, there are about 30% of owners of SMEs who are preferring not to pay their loans in the upcoming 6 months. This is only because nobody wants to take any risk and the situation that they are in has not been caused by them.
Most of such people are in a state of panic as they are seeing that most of the schemes run by the government will last till the end of September.
After we get through all these situations, there is a fear of whether the small and middle scale industries will meet the requirements of cash flow in the future.
If you are having difficulties finding a good source of information regarding these matters, Accounts NextGen is the perfect spot for you. We are in this business for a long time to provide you with authentic information about finance.