We are currently helping a family who has got into financial difficulties due to their business failing. Assets have had to be sold at below cost prices and they were left with unsustainable debt levels. The following steps are currently in process to turn around the families finances:
1. Immediately reduce the interest funding costs by eliminating high credit card debt.
2. Review all family expenses to eliminate and reduce costs. e.g. utilities reduced from 7% to 30%, reduced food waste and better buying cut costs by over 40%, bundling internet, landline & mobile into one provider saved over 25%, reviewing business expenses highlighted extra GST credits etc.
3. The family and business were running 3 vehicles and we recommended sale of one.
4. The business is setting up strict cash flow discipline so that expenditure can be delayed or avoided
5. BUDGETS were prepared so that expenditure and income can be controlled and measured.
We are liasing with the family on areas that we have identified. e.g. accounting fees at almost $3000 were too high (going to use bookeeper and year end tax accountant), 18 yr old child beneficiary of business family trust reducing overall PAYG tax for current year and we worked with ATO to reduce tax commitment, some expenses were treated as private instead of business expenses, etc
6. We are using the surplus cash flow to use to repay all private debt.
7. Further steps to encourage implementation of the steps above and allow for costs of annual holiday
