Spending on capital assets usually cannot be deducted immediately. Instead, small businesses claim the costs over time in accordance with the asset’s depreciation. There are many different processes that businesses can employ to make claims on their assets. For small businesses with lower-cost assets, methods such as simplified depreciation or the threshold rule can help to make more effective claims.
Simplified depreciation: Under simplified depreciation rules, business owners can immediately deduct the business portion of each depreciating asset that was first used or installed ready for use up to:
$30,000 from 7.30pm (AEDT) on 2 April 2019 until 30 June 2020.
$25,000 from 20 January 2019 until 7.30pm (AEDT) on 2 April 2019.
$20,000 before 29 January 2019.
Owners can also pool the business portion of most other depreciating assets that cost more than the relevant threshold in a small business asset pool. Then they can claim a 15% deduction in the first year, regardless of whether they were purchased/acquired during the year, and then a 30% deduction each year after.
The threshold rule: The threshold rule allows owners to claim an immediate deduction for most expenditure of $100 or less, including any GST, to buy physical assets for the business. The rule is designed to help save time as purchases don’t have to be specified if they are of revenue or capital nature. Some examples of items costing $100 or less that fall within the threshold rule are:
Office equipment – staplers, pens, books, etc.
Catering items – cutlery, glasses, table linen, etc.
Tradesperson small hand tools – pliers, screwdrivers, hammers, etc.
Strategic planning for businesses ensures resilience and continuity in adversity.
While businesses often focus on growth and expansion, preparing for potential disruptions and emergencies that could threaten operations is equally essential.
This is where disaster management, crisis, and continuity plans come into play.
Disaster Management Plans
Disasters can strike without warning, ranging from natural calamities like floods, earthquakes, and hurricanes to human-made incidents such as cyberattacks, data breaches, or supply chain disruptions.
Disaster management plans outline strategies and protocols for responding to and recovering from such events swiftly and effectively. These plans typically include measures for ensuring employee safety, protecting critical assets and infrastructure, and minimising downtime.
By having a comprehensive disaster management plan, businesses can mitigate the impact of disasters and expedite the recovery process.
Crisis Management Plans
While disasters are often external events beyond a business’s control, crises can arise from internal factors such as leadership failures, product recalls, or reputational issues.
Crisis management plans are designed to address these unexpected challenges and mitigate their impact on the organisation’s reputation, brand equity, and bottom line. These plans outline communication strategies, escalation procedures, and decision-making frameworks for managing crises promptly and transparently. By proactively addressing crises and demonstrating resilience, businesses can preserve stakeholder trust and emerge stronger from adversity.
Business Continuity Plans
Business continuity plans focus on maintaining essential functions and operations during and after disruptive events to ensure minimal disruption to business operations.
These plans identify critical processes, resources, dependencies, and alternative strategies for sustaining operations during a crisis or disaster.
Business continuity plans encompass remote work arrangements, data backup and recovery procedures, and alternative supply chain routes.
By prioritising continuity and preparedness, businesses can reduce downtime, protect revenue streams, and uphold their commitments to customers and stakeholders.
Benefits of Comprehensive Planning
Risk Mitigation: By anticipating potential threats and developing proactive strategies, businesses can mitigate the impact of disruptions and minimise associated risks.
Resilience and Adaptability: Comprehensive planning fosters organisational resilience, enabling businesses to adapt and respond effectively to changing circumstances and emerging challenges.
Stakeholder Confidence: Demonstrating preparedness and responsiveness instils confidence in customers, employees, investors, and other stakeholders, strengthening relationships and fostering loyalty.
Regulatory Compliance: Many industries have regulatory requirements mandating development and implementation of disaster management, crisis, and continuity plans. Compliance with these standards is essential for avoiding penalties and legal liabilities.
Competitive Advantage: Businesses prioritising resilience and preparedness gain a competitive edge by differentiating themselves as reliable partners and service providers.
Disaster management, crisis, and continuity plans are integral components of strategic planning for businesses seeking to enhance resilience and ensure continuity in the face of adversity.
By investing in comprehensive planning, businesses can mitigate risks, maintain essential operations, and safeguard their reputation and bottom line.
In today’s volatile and uncertain business environment, proactive preparedness is not just a best practice but a strategic imperative for long-term success and sustainability. Need assistance with strategic planning as we approach the end of the financial year? Speak to one of our trusted business advisors.
