Building resilience in the new financial year: Risk management strategies for business owners
As we transition into the new financial year, businesses face an ever-evolving landscape of risks and uncertainties. Effective risk management strategies and appropriate tax advisors in Australia are essential to building resilience and ensuring business continuity.
Understanding your risk profile
The first step in developing robust risk management strategies involves understanding your business’s unique risk profile. This encompasses identifying potential risks, assessing their impact, and determining the probability of their occurrence. Risks could range from operational and financial to regulatory and reputational.
Regulatory risks: The importance of tax compliance
One significant risk that businesses face pertains to regulatory compliance, particularly concerning tax laws. Non-compliance with tax laws can result in hefty penalties and reputational damage. Consequently, understanding and adhering to changes in relevant tax laws should be a key element of your risk management strategy.
For example, recent changes in corporate tax rates and the Research & Development (R&D) tax incentive should be considered. Businesses should ensure they are compliant with these new laws to avoid potential penalties and maximise tax benefits.
Mitigating financial risks
The new financial year brings about changes that could impact a business’s financial health. To mitigate financial risks, it’s essential to conduct regular financial health checks. This includes revising your financial plan, conducting cash flow analysis, and assessing your capital structure. As well as seeking financial planning services in Australia. In terms of tax, leveraging opportunities such as the extended temporary full expensing scheme for depreciating assets can support your cash flow. It is a measure provided by the government, allowing businesses to deduct the full cost of eligible assets to manage financial risks effectively.
Building a resilient business model
Building a resilient business model involves integrating risk management into your strategic planning process. This means not only considering risks but also identifying opportunities for growth and innovation.
For example, changes in tax laws related to R&D incentives could present opportunities for businesses to invest more in innovation. Businesses that take a proactive approach to risk management by seizing such opportunities can build a more resilient business model.
Seeking professional advice
Given the complexity of risk management and the evolving nature of business risks, seeking professional advice is crucial. Risk management professionals can provide a holistic view of your business risks and help develop strategies tailored to your unique risk profile.
In the new financial year, risk management should be at the forefront of every business owner’s strategy. Building a resilient business involves understanding your risk profile, maintaining regulatory compliance, managing financial risks, and seizing opportunities. By doing so, you can navigate the new financial year confidently, ready to face any challenges that come your way. Our team of experienced professionals is here to guide you through this process and help you build a resilient business.
About Sphere Accounting & Advisors-
If you are seeking tax advice, your search ends with Sphere Accountants and Advisors. We consider the complete picture and continually look for ways to improve your financial situation to create, protect, and grow your wealth. We apply this approach whether you come as an individual or a business. With a breadth of expertise spanning all aspects of taxation, accounting, financial planning, and more, we can offer a complete solution for all your financial needs.
Visit our website, call us at (03) 8899 6399, or email us for more details.