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Monday, 16 July 2012 12:02

Revisited

By Lyle Holm - CEO Metis Consulting

This month we re-look at the roll out of the carbon tax legislation. We examine critically the impact the tax will have on Australian business and outline some practical measures to assist you prepare your business for the challenges that lie ahead.
Beginning July 1st the Government has introduced a carbon dioxide tax where high emitters of carbon dioxide will initially pay $23 per tonne of carbon emitted. This cost will gradually rise until 2015 when we will enter a flexible price phase where prices will be determined by market forces. The aim is for Australian carbon emissions to be cut by 20% by 2020 and 80% by 2050.By Lyle Holm - CEO Metis Consulting

This month we re-look at the roll out of the carbon tax legislation. We examine critically the impact the tax will have on Australian business and outline some practical measures to assist you prepare your business for the challenges that lie ahead.

Beginning July 1st the Government has introduced a carbon dioxide tax where high emitters of carbon dioxide will initially pay $23 per tonne of carbon emitted. This cost will gradually rise until 2015 when we will enter a flexible price phase where prices will be determined by market forces. The aim is for Australian carbon emissions to be cut by 20% by 2020 and 80% by 2050.

By Lyle Holm – CEO Metis Consulting
A business can be profitable and asset rich on paper but if it does not have the cash flow and the cash reserves to meet its obligations as they fall due, creditors can  exercise their rights to petition for insolvency proceedings to protect their position. In this article we provide an analysis of the current trends in corporate insolvencies as well as some tips regarding maintaining debt payments and achieving strong growth.
The global financial crisis (GFC) saw a number of larger corporations go out of business while last year’s insolvencies were led by smaller firms. Corporate insolvencies increased by 9.2% last year to 10, 481 according to the Australian Securities and Investments Commission (ASIC). This is the largest corporate insolvency figure since the GFC and is 20% higher than the average of the previous five years combined. Insolvencies have been steadily rising over the past four years. In 2010, the rise was only 1.7%, with insolvencies going up 3.6% in 2009, and the sharpest rise of 212.2% occurring in 2008 due to the GFC.
Key findings suggest that there is heightened unease in the business community with only 15% of Australian companies surveyed indicating they are very optimistic for the year ahead. This figure has fallen significantly from 39% last year. The highest ranked challenges expected by business leaders during 2012 include the state of the economy (53%), followed by cost management (51%) and recruitment and retention.
Analysts suggest that a  key driver of liquidations is the Australian Tax Office (ATO).  The ATO brought in a number of new measures including interest-free payments, deferred tax payments and other flexible repayment schemes in 2009 to help small to medium enterprises (SME’s) that had suffered during the GFC. Despite the current economic climate - including the Eurozone debt crisis - these measures have been phased out leaving businesses reeling from the impact of the tough economic conditions..
Despite the challenges business owners have important legal obligations to their customers, suppliers, employees and to the public generally not to trade in an insolvent position.
So, how is your business travelling, where does it stand and where is it heading?
The following can indicate that your business is struggling and would benefit from specialist advice:
1) Trade creditors are increasing over time without a corresponding increase in sales.
2) There are unpaid employee and/or directors’ wages, delays in BAS lodgement and payment of GST and PAYG obligations, and mounting superannuation commitments.
3) Your business is requiring capital contribution without a corresponding increase in gross sales.
4) The internal accounting system is not maintained and there is a problem with bounced cheques.

5) There is an inability to service orders and suppliers are pursuing debts or requiring cash on delivery (COD)By Lyle Holm – CEO Metis Consultin

by Lyle Holm - CEO Metis Consulting

By Lyle Holm - CEO Metis Consulting

A business can be profitable and asset rich on paper but if it does not have the cash flow and the cash reserves to meet its obligations as they fall due, creditors can  exercise their rights to petition for insolvency proceedings to protect their position. In this article we provide an analysis of the current trends in corporate insolvencies as well as some tips regarding maintaining debt payments and achieving strong growth.

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