The end of JobKeeper brings a substantial downturn in your cashflow.

The end of JobKeeper brings a substantial downturn in your cashflow.

End of JobKeeper

The end of JobKeeper occurs on 28 March 2021.  Any company currently receiving JobKeeper is going to experience a substantial decrease in cash flow, relative to its number of staff.

Implications of JobKeeper ending

The implications of JobKeeper ending could range from a mild reduction in financial performance to a catastrophic shift in a company’s viability, making it unviable to continue to operate in either the short, medium or long term. This could be due to an inability to pay direct staff wages or associated entitlements, i.e. superannuation and PAYG instalments, or while these may be able to be paid other costs such as rent or the purchase of essential supplies may not.

Any company receiving JobKeeper up to its cessation needs to look carefully at its financial position and future trading projections and form a realistic view as to whether it can continue to trade profitably or, failing that, whether the owners are prepared and able to inject financial support for a short period until such profitability can be achieved.

Inability to continue after JobKeeper

If the assessment determines that it is not possible to operate profitably then alternative options need to be urgently considered. These could range from implementing one or more strategies in relation to cost reduction, revenue growth, capital injection and/or an informal or formal solvency strategy to deal with the company’s financial position.

An assessment of the pros and cons of each of these strategies, and how they may be best applied for the benefit of your company, is beyond the scope of this article. To arrange a no obligation, no cost review and discussion about your specific circumstances please telephone your local Rodgers Reidy office today.

Brisbane – (07) 3136 5700

Sydney – (02) 9262 1944

Dubbo (NSW) – (02) 6882 6076

Melbourne – (03) 9670 8700

Geelong (Vic) – (03) 5291 3720

Adelaide – (08) 8470 9010

Darwin – (08) 8914 8844

Hobart – (03) 6146 3322

Launceston (Tas) – (03) 6364 3041

Perth – (08) 9328 6262

 

James Imray

About the author

James Imray

Director

Meet our Team of Experts

Having worked in Insolvency and Reconstruction since 1993 on the Gold Coast, James moved to Brisbane in 1998. He joined the Rodgers Reidy Brisbane office predecessor firm in 2007 and became a director during 2010.

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