Welcome to 2022; it feels like we have turned a corner with the world finally having worked out how to live with COVID. Despite global conflict, wars and elections, the outlook feels more positive, possibly as a result of the growing economy and businesses becoming more adaptable and resilient to the continual disruptions.
Here are our observations for the coming year.
Ongoing labour shortages and the need for automation
- Labour shortages are here to stay and will become increasingly more costly. Labour shortages and low unemployment will coexist until immigration is significantly increased however it’s unlikely that anything will be done to help this until the federal election is over.
- Businesses continue to automate to protect against the ongoing shortages and to ensure they can be adaptable to customer demands. We have seen examples over the last year of businesses who have reaped the rewards of automation and process improvement. Having access to the full range of equipment finance solutions is more important than ever.
- The Instant Asset Write-off has now been enacted to continue to June 23 together with the temporary loss carry back. The tax advantages are significant and another reason to bring forward the decision to automate.
- Resilience continues to be the key for most businesses in the face of continual disruption which is expected to continue across the supply chain and labour markets. Engaging and retaining employees continues to be essential; have a look at this article which provides a nice insight into how businesses can take advantage of the current climate.
Supply Chain Issues and Future Opportunities
- Supply chain issues and increasing prices continue to be a real concern with many businesses choosing to pre-order and hold greater levels of stock and raw materials to protect their business against uncertainty. Whilst this gives greater certainty to supply, it places an increased burden on working capital.
- Working Capital continues to be necessary to make sure you have the flexibility to take advantage of opportunities as they arise as there will be more occasions than ever over the next year to take on competitors or grow into new markets. We can offer a complete finance health check on your company to ensure that your existing facilities are structured correctly to maximise the benefits to your business. Contact us to hear more.
- The ATO is now enforcing action against ATO debt and it’s important that businesses have sufficient working capital so that they don’t need to enter into an arrangement with the ATO which will have significant flow on effects when accessing finance.
Increasing Interest Rates and Insurance Premiums
- Long term fixed interest rates have gone up by more than 2% over the last 9 months and property rates can be expected to increase by a similar amount over the next year. Now is a good time to review your property finance to ensure you have the best options with the least amount of security provided. The major banks are more difficult than ever – don’t try and do it yourself, it’s what we do, and we can usually do it better.
- Like everything else, insurance costs are increasing so it’s a great time to also review your insurance and ensure you have the right amount of coverage for you and your business. We have options to help you review your General Insurance, Bad Debt Insurance and Key Man Insurance, among others, as well as Insurance Premium Funding options which removes the need for lump sum payments and spreads the cost over the year.
Customers are more than ever looking for trusted finance experts who understand their needs and who provide them with access to the finance solutions they need for their business to grow and prosper.