There has been a surge in registrations for the JobKeeper program but small businesses have been warned their financial records need to be streamlined or they could face problems in the future.
More than 270,000 businesses have already registered for the government support program, which is designed to help businesses retain staff during the coronavirus emergency.
The number of business registrations is expected to increase significantly, with the government also announcing an extended deadline until the end of May 2020.
Hayes Knight chairman Greg Hayes said registration was only the first part of the requirements for JobKeeper. Many small businesses should review their financial reporting systems and upgrade them if they are found to be inadequate.
Monthly reporting requirements to the Australian Taxation Office under JobKeeper means many small businesses will need to be more aware of their ongoing financial position than ever before.
JobKeeper reporting broadly fell into three parts, said Mr Hayes. The first was to identify the employees of a business.
While that may seem straight-forward, it was important for a business to monitor if that number changed. such as staff members resigning or going on maternity leave.
But the other components of the reporting could be even more challenging, especially if the SME does not have sophisticated financial reporting systems in place.
Each month, the GST figure for a business registered for JobKeeper has to be supplied to the ATO. The tax office also needs a forecast for the following month.
''If a small business and its advisers are used to preparing those figures regularly, then it may not be too much of a problem to comply '' said Mr Hayes.
''However, if there are not satisfactory systems in place, then there may need to be some more work done to get that business ready.''
By their nature, financial forecasts are difficult at any time. That is compounded in the current environment, when many businesses are facing the greatest period of uncertainty in their existence due to the coronavirus emergency.
So the task facing many businesses is substantial. On the one hand, SMEs are understandably anxious to secure the government's support to help protect wages to their employees, so signed on for the JobKeeper program in big numbers.
But that requires them to make predictions on the future of their business and their industry, when the economy is undergoing unprecedented disruption.
One potential problem for small businesses is having to explain a major discrepancy between real and forecast numbers to the regulators at some point in the future
But Mr Hayes said the best method is to take a disciplined, information-based approach when preparing those numbers for a small business.
''The key is to use strong reporting systems and to work closely with an adviser.''
Hayes Knight has experts who can guide SMEs through the various government support packages. Contact us on 02 9221 6666, or leave a comment below.