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Navigating a New Financial Landscape With Xero

Since COVID-19 lockdowns began to ease, SMBs have scrambled to reopen their business and adapt to the new environment amid recession and social distancing. Many, like A Team Tuition, shifted their business online to continue trading. Others pivoted their operations entirely to keep revenue coming in, such as StageKings which went from building theatre sets to office furniture.

Salesforce Regional Director, Commercial Sales, Silvana Tagand, and Salesforce Account Executive, Erika Flavin, share some crucial tips from their discussions with online accounting software provider Xero on how to navigate your small business through a new financial landscape.

Know your numbers

Having visibility over your cash flow and finances sounds straightforward, but it’s something many businesses struggle to do well.

“Profit does not equal cash flow,” says Cameron Anderson, Xero’s Head of Agribusiness and Practice Strategy in New Zealand.

“Find what the specific cash flow levers are in your business and how you could change those to your advantage.”

To do this, you need consistent oversight of:

  • cash flow and working capital
  • forecast revenues and liabilities, including taxes
  • profitability
  • outstanding invoices owed to you
  • regular and one-off operating expenses, including subscriptions and insurances
  • any loan balances.

This is where digital and cloud technologies are really useful. For example, accounting software gives you clarity and real-time visibility over your accounts. A good CRM can track stock levels and sales volumes. This data can then be shared with your accountant or bookkeeper.

Once you have good oversight of your numbers, you’re better placed to identify ways to maximise revenues, slash unnecessary spending and ultimately increase profits.

Tap into government support

Both the Australian and New Zealand governments have developed economic support packages to assist businesses – especially SMBs – to keep trading and retain workers through the worst of the crisis. Various schemes offer payroll support, tax relief and cash flow assistance for businesses that have suffered significant downturns due to COVID. And authorities in both countries are checking to ensure they are not abused.

“We are aware of a number of spot checks occurring, so it’s best to have your ducks in a row,” says Luke Smith, Xero’s Director of Operations, New Zealand.

Having visibility over your numbers, as previously mentioned, will help you to identify the size of any downturn you have experienced and hence your eligibility for relevant government assistance.

Get the right advice

Wherever you may have uncertainties or need advice, there are qualified and experienced experts that can help. But it’s important to seek expertise that is suitably qualified, reputable and best meets your unique circumstances.

“There are literally tens of thousands of advisers to choose from, so make sure you have the right kind of adviser to set you up for success,” explains Matthew Prouse, Xero’s Head of Industry, Australia. 

Tailored advice can cover any aspect of your operations:

  • Accountants and bookkeepers offer guidance over financial and tax matters – particularly important for claiming COVID assistance measures.
  • Finance brokers provide guidance over loans, small business finance and insurances.
  • You can also seek out coaches and advisors in everything from sales and marketing to IT, business strategy and specialised legal advice.

To support the small business community, Xero has activated a dedicated Business Continuity Hub on Xero Central. Here, SMBs can self-serve with credible resources and go directly to the Xero community  for advice tips through Xero’s community forum.

Look after your health and wellbeing

Most important of all is your own health and wellbeing. It’s a highly stressful time given the global pandemic and resulting recession. But you can’t help your business, your employees or your customers if you are rundown.

“You don’t have to solve all these issues on your own; you’re not in it alone,” Cameron Anderson says.

While regular communication with your team can be as much for your own benefit as theirs, he recommends discussing matters with your advisors as well as reaching out to other business owners. The latter is, perhaps, most valuable since they share your current challenges.

Meanwhile, Luke Smith explains that psychologists believe we respond to a crisis in three phases, and it’s important to acknowledge these in order to work through them.

“The first is emergency. The second is a regression phase, where people get tired and lose their sense of purpose, they may not be eating or conversely eating too much. That’s because one of the mind’s ways to defend itself from confusion is to retreat to a mental comfort zone,” he says.

“It’s very dangerous for teams, and it’s real and infectious.”

The third phase is that of recovery, which is best managed with a targeted plan – one which addresses various outcomes from best to worst-case scenarios.

“We all experience stress in different ways, so get help early to minimise its impact,” says Luke Smith.

“If you do need help personally and you’re based in New Zealand, we offer our free Xero Assistance Program (XAP) for all New Zealand subscribers, which includes counselling and wellbeing support for business owners, their staff & associated families.”

To find out more about getting your small business back to financial stability, watch Xero’s on-demand webinars for Australian and New Zealand small businesses.

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Silvana Tagand

Silvana Tagand is Regional Sales Director at Salesforce.

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