DIY Insolvency

The worst idea you’ve ever had (and a much better one to consider)

Okay, so this is not how you pictured your 2020 going for your business. Heck, this is not how you pictured any year in business or otherwise that wasn’t a post-apocalyptic TV show and at least in that version, there was a hero guaranteed to save the day.

But what if, in your business, you’re really staring down the barrel of insolvency? That can leave a truly hollow pit in your stomach that makes you feel more alone than Tom Hanks did after Wilson floated away.

Just so you know, you’re not really alone. According to insolvency firm, Jirsch Sutherland, around 51% of Australian business owners are expecting to explore restructuring or insolvency options in the first two quarters of this financial year (20-21). Whilst JobKeeper winding down might seem like a key issue, it’s really all still about cashflow (or rather the continuing lack of it) with more than a third of business owners citing it as their major stressor. And then there’s the winding back of ASIC’s insolvency pandemic provisions.

So you turn to someone you can rely on, someone who knows you and has some answers, someone who is up to date with all the latest policy and data that can keep your retirement funds safe and your finances in order.

Your qualified financial profes-

Google.

You Google it.

And that is where your problems start.

Why not GIY (Google It  Yourself) with your finances?

Look, sure, you have to start somewhere. When it’s 3am and you’re staring at your books with a growing sense of dread, it’s comforting to tap on a few keys and feel like you’re doing something, that you’re sort of making progress. When you feel out of control, your brain will do anything it can to wrest that control back – by whatever means necessary, even if that means asking for financial advice on the same forum you asked how to make a sourdough starter (which probably didn’t work – hmmm).

And for the 34% of business owners looking to Google for insolvency advice, it might turn out the same way.

Whilst Googling might feel like a relief, you have to remember that just like starting, running or growing your business wasn’t something you could learn in an instant, riding out the tough times also can’t be fast-tracked with a search bar. Not only is your business is unique;

1. You’ll probably find 3 million search results (do you really want to wade through all 3 million to find something that ‘might’ be relevant to your circumstances?)
2. insolvency procedures and/or restructuring are complex and complexity under stress is even more difficult to wrangle as a DIY job.

But it gets worse than that in that the potential consequences of your GIY job could be dire. JobKeeper and government intervention have done a great job bridging the gap for businesses taken by surprise by COVID, but as we draw later and later into the new normal of the pandemic pandemonium that is 2020, it’s important to know where that bridge ends – and what’s waiting on the other side.

A professional can tell you not only your obligations to the ATO, ASIC and others – but your insolvency options. As great as Google or Siri is, it is not their sole responsibility to know the reality of your business finances – they also have to keep up with the weather and play Despacito on occasion, and claiming they steered you wrong won’t really serve as an excuse if you fall foul of ASIC, the ATO or FairWork.

So, what can you do?

Take a good look at your books, get to grips with your numbers. Then gather up your business plans and what your experience has taught you about how your business functions… And then talk to a professional. Don’t take on more than you need to in trying to learn how to handle your own insolvency or restructure whilst navigating the massive proverbial wrench that is COVID. That’s what real professional advice is there for – to help steer the ship when things aren’t going according to plan.

And one more thing….

Here’s the thing, you should google your options. Research is a part of doing business and whilst we don’t recommend for a moment you rely on it for planning your business’ financial future, bringing your questions to the table when you do meet your financial advisor is a great idea. Let them know what you’d like to do and they can work out what’s possible and what needs to be put on the back burner whilst more pressing matters take centre stage.

We’re not living in the 1800’s with ‘moneymen’ wearing top hats and talking to their clients as if they knew nothing. Rather your qualified professional accountant and business advisor will work with you to find what’s important to you in order to make the best of a bad pandemic lot.

And that’s where we can help. If you’d like help working through insolvency or restructure, or just want good financial advice from a real person who provides advice based on your own unique circumstances, we’d be delighted to talk. You can call us on 02 6023 1700 or drop us a note via the form below