Recovering from disaster may boost affected businesses long-term says PKF

Businesses recovering from interruptions such as the recent natural disasters in Queensland and Victoria are being urged to see the rebuilding process as an opportunity to improve their systems and operations. National chartered accounting and business advisory firm, PKF, wants business to seize opportunities to implement plans that ensure future disruptions to their operations are minimised.

PKF's director of Enterprise Advisers, Matthew Field, said the biggest obstacle many face as a result of unexpected events, such as natural disasters, is not having a recovery plan in place, which would allow them to continue to operate their businesses. 

"Many business owners in Queensland in particular thought they were properly prepared for an unexpected business interruption, like flooding. However, they were caught out having inadequate plans in place. Other businesses had no contingency plan at all, with some losing all business records as these were stored on-site in hard copy, rather than electronically," Mr Field said. 

"While tragic, the recent natural disasters present a unique opportunity to affected businesses and offer valuable lessons to all businesses. Apart from realising the need to have robust disaster plans in place, in many ways the events we have seen have provided a clean slate on which businesses can rebuild their operations and devise new and more resilient processes and systems," Mr Field said. 

According to Mr Field, business owners recovering from unexpected business interruptions due to natural disasters should seek to combine the available government assistance and tax concessions for immediate relief with a more comprehensive medium-term rebuilding and future risk analysis plan. 

In the aftermath of the Queensland floods and cyclone, the Federal Government has made a series of tax concessions and other assistance measures available to businesses, including tax exemptions and lodgement extensions. 

"When the Queensland floods first hit, many of our clients were concerned with short term issues such as their ATO obligations like deadlines for BAS payments. While Federal Government assistance for disaster-affected businesses is fairly comprehensive, relying solely on this to continue normal operations would be like 'placing a band aid on a bullet wound', as fundamental issues regarding how they function would be left unchanged. 

"We are urging our clients affected by business interruption not to take a short-term view of their recovery. Rather, they should see this as an opportunity to reconstitute their businesses, comprehensively examine their models and processes and use the opportunity of rebuilding to improve their business as a whole," Mr Field said. 

Looking further on the bright side, businesses now have a unique opportunity to improve their products or service offerings from taking advantage of newer technology or plant and equipment replaced after the natural disaster.  

Mr Field said PKF was advising businesses affected by interruptions to their operations, due to factors beyond their control, to seek Australian Government relief in a number of ways:

•·         Federal and State Government grants and subsidies.

•·         Tax exemption assistance from the ATO.

•·         Tax agent relief for professionals.

•·         ATO lodgement extensions.

•·         Other ATO assistance and support - for example reconstruct tax records, Fastrack refunds, and tax hardship concessions.

•·         Certain payments from employers to employees relating to the floods, for example emergency clothing, transport and accommodation may be exempt from Fringe Benefits Tax.

•·         ATO extensions to meet BAS and other lodgement obligations without penalties.

•·         Accounting professionals are receiving extra support from the ATO to help clients recover from the disaster.

www.pkf.com.au

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