Date posted: 08/03/2022 4 min read

10 ways to stay afloat following record floods – CA ANZ checklist

While some regions are starting to dry out, the effect of recent record rainfall and floods will linger.

Chartered Accountants Australia and New Zealand (CA ANZ) today released a checklist for small businesses hit by the weather, many of whom are clients of Chartered Accountants across Australia.

Australian Tax Leader Michael Croker says small businesses are the heart of our economy and communities, and when natural disasters strike, we all feel it.

“We all held high hopes that 2022 was going to be different,” Mr Croker said. “But sadly, the start of this year has had a familiar feel – with natural disasters, international unrest and ongoing Covid-19 uncertainty.

“With flooding insurance claims in Queensland and NSW already estimated at $1.3 billion and nearly 87,000 claims made, local accountants are in for a big financial clean-up task ahead.”

1. Look after yourself so you can look after others

Before anything, make sure you and your loved ones are safe – that includes both your physical safety but also your own personal wellness and mental health.

“This is a stressful time and many business owners will feel the pressure of so many people who rely on them. It is vital to get enough sleep, eat well and take care of yourself during this period.

“And if there is still heavy rain and flood water about, stay put until it’s safe. It’s just not worth the risk.”

More than 5,000 Chartered Accountants received mental health training over the last year – so they know how to listen and engage with people facing difficult circumstances.

2. Not a digital business yet?

One of the losses that a business can experience after a natural disaster is damage to its physical or electronic documents.

“While we aren’t all digital natives, securing physical and papers records is essential. Digital copies should be made, and ideally backed up in the cloud.

“There’s a lot of user-friendly ways to do this now – including software-as-a-service bookkeeping, the ability to scan from your phone and many online secure cloud storage solutions.”

3. Records and repairs

“Document everything you can when it is safe to do so. Take photos of damage and lost assets, write down key observations and even note down a timeline of events as you remember it and all of your losses.

“This will be essential for conversations with insurers, customers, staff and suppliers, and to help you better plan and prepare for the future. And, remember, tax deductions apply to repairs, not improvements.”

4. Check your insurance

“Natural disasters often prompt a review of future insurance needs. Before entering into a new insurance policy, get advice on the costs and benefits.

“Business owners should also review their existing insurance policies to check coverage and entitlements and work collaboratively with insurance companies.

“Relocating business premises to a less flood prone locality might need to be on the agenda.”

5. Don’t get scammed

Each new natural disaster brings out scammers posing as charitable fundraisers or offering clean-up services for an “upfront” cash payment. There were also cases of unlicensed tradespeople taking advantage of the vulnerable offering housing and roof repairs.

“Many people also want to donate quickly to help out, so be careful of scammers impersonating reputable organisations seeking donations. Only donate to registered charities and if you’re in-doubt, err on the side of caution and visit the scamwatch website – where you can also report a scam.”

Most types ATO debt collection activity is put on hold for postcodes impacted by natural disasters, so be wary of contact by those purporting to be ATO officials.

6. Access government emergency grants

Federal and State governments are collaborating to offer emergency disaster relief payments – and a range of charities and NGOs have stepped in to help.

“So make sure you check your NSW and Queensland entitlements and keep an eye out for targeted small business support – you may need a hand from your accountant for the eligibility criteria and application processes.”

7. Speak with suppliers and customers

“All business owners need to keep up strong communication with their customers and suppliers during times of crisis. Review any purchase and supply agreements to determine the rights and obligations of both parties.

“Find out if suppliers will accept delayed payment terms and how quickly they can re-supply what's needed to re-start business operations.”

8. Revise business cash flow

“Following any disaster, business should discuss their financial forecasts with their accountant for the current financial year and subsequent years.

“Be realistic and conservative in your estimates. It might also be a good investment to seek specialist business recovery advice and lenders will be keen to know how the flood impacts their loans and repayments.”

9. Tax

“Business owners should work with their accountant to see if any favourable tax adjustments can be made in their next BAS or tax return. If there is cash available, a business could be eligible for a 100% tax write-off for equipment to replace depreciating assets lost or damaged in the flood.

“Your accountant can also liaise with the ATO should extra time be needed for tax lodgments and payment of tax debts.”

10. Ask for help

“Finally, don’t be scared to ask for help. Small business owners are incredibly self-sufficient, resourceful and resilient, but this can sometimes mean they can become disconnected.

“Take advantage of opportunities to network with local business groups, chambers of commerce – and talk to fellow small business owners. Shared experience and a little bit of communication can go a long way.”

“Once operational again, consider a ‘by local’ campaign to get sales back up and consider a ‘discount for locals’ plan to thank those who’ve helped with the clean-up.”

Flood Response

Read more about our flood response here.

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