Wagons, Saddlebags, Drowning – Navigating Business Challenges

heavy-saddlebags-image-from-Bing

Dire predictions of insolvencies hit the headlines during the COVID-19 pandemic when our business landscape faced unprecedented challenges. The term “zombie companies” gained traction. It’s a label I still find troubling because it seems to disregard the dedication of hardworking business owners fighting to keep their ventures afloat. Undoubtedly, government pandemic incentives provided crucial support.

In those testing times, my advice to company directors and their accountants was to “circle the wagons” same as those intrepid explorers in times gone by. It was an approach rooted in proactivity to safeguard the company’s interests and those of its stakeholders.

Since then Australian commerce has faced new pressures from the Russia-Ukraine war and other marketplace instabilities. My old movie analogy applies now to prevailing high levels of company debt that accumulated like rocks in “saddlebags” due to money owed mainly to  ATO.

In 2022, ATO intensified its debt collection methods using statutory demands, credit bureau reporting and the more recent Director Penalty Notices (DPN) resulting in some late lodgments and agreed “payment arrangements.” One noteworthy aspect of DPNs is their delivery to directors’ registered home addresses as per ASIC’s register is deemed valid even if you have moved house. This underscores the importance of keeping details current on the ASIC register of company directors.

If or when you receive correspondence from the ATO, exercise caution to ensure its legitimacy, and consult a qualified, registered adviser before taking any action. Go to your trusted tax accountant, legal counsel, or an ASIC-registered insolvency practitioner in your jurisdiction. Navigating intricate matters demands prudence and guidance from trusted professionals. It’s imperative to note that Debt Solvers and Pre-Insolvency Advisors are not  ASIC registered.

With true grit let’s learn from experience, build resilience and keep our business community strong and well-prepared.

Note to self:  empty saddlebags before crossing river

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About Auxilium Partners

Auxilium Partners is a WA owned and operated insolvency, forensic accounting and mining advisory firm based in West Perth.

Our partners Bob Jacobs and Andrew Smith are Registered Liquidators with ASIC and Paul Cockburn is a Certified Fraud Examiner.

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