This Saturday will mark 30 days until JobKeeper comes to an end.
The government subsidy has supported not only the retail sector, but many Australian industries through the COVID-19 shutdowns and was a welcome support for businesses nationwide.
However, the payment is set to come to a close on March 28 and turnaround and insolvency firm Jirsch Sutherland is urging struggling businesses to act now and seek help.
"JobKeeper has been a godsend for many businesses and while many no longer need the support, there are still countless others that have been relying on it,"Jirsch Sutherland national managing partner, Bradd Morelli said.
"Its conclusion may be a trigger for financial distress, as many businesses have exhausted their cash resources and won’t be able to stand on their own two feet and pay staff wages," he said.
The industry has also come out of the first half reporting season, with many revealing that store closures and restrictions had a negative impact on their trade throughout this period.
And, there's no immediate release from the uncertainty of COVID, with the industry remaining at the whim of outbreaks and subsequent lockdowns as the vaccine rollout makes its way through the population.
These stressors are adding to the pressure that retailers are facing ahead of JobKeeper ceasing, with Morelli adding that businesses can do a simple self-assessment to see if they need help.
Business owners and directors need to determine whether, post-stimulus, they have the ability to pay staff wages, tax, rent and superannuation.
"Put simply, will your business be able to keep its head above water post-stimulus?
"If the answer is no, then it’s crucial to speak to a trusted adviser.
"It’s critical for business owners and directors to be proactive and to act early if they’re in financial distress.
"There can be options but it’s important to understand which process is right and know when to use it.
"There’s a huge difference between early intervention, a controlled process, a reactive process and a forced winding up," he said.
Morelli adds that the ATO will also begin pursuing outstanding debts, which could add further pressure to businesses.
"While the ATO has been very quiet for almost 12 months, that won’t last (their debt book is an estimated $53 billion and they want to recoup this).
"That’s when we expect to see the insolvency wave building.
"In addition, the temporary restructuring relief, which relates to statutory demands and provides a director of eligible companies with a temporary safe harbour from personal liability for insolvent trading, ends on March 31.
"There’s now even greater need for directors to be fully aware of all the options and act appropriately," he said.
