Organising a payment arrangement in Australia typically involves contacting the creditor (such as the Australian Taxation Office for tax debts) and discussing your financial situation. You’ll need to propose a plan that outlines how you intend to repay the debt over time. This plan should be realistic and consider your current financial capabilities. It’s important to provide accurate financial information and to be proactive in communication. If your proposal is accepted, you’ll receive terms of the agreement that you must adhere to.

When approving a payment arrangement, the Australian Taxation Office (ATO) considers various factors including your business’s past compliance history, the amount of debt, your capacity to pay, and the reasonableness of the time frame for the proposed payment plan. They also assess the likelihood of future compliance with tax obligations. It’s important to provide accurate and complete information about your financial situation when requesting a payment plan. The ATO aims to work with taxpayers to find a viable solution for both parties.

When managing and clearing debts with the Australian Taxation Office (ATO), several options are available for repayment. For tax debts under $100,000, a self-service payment plan can be set up, which requires the first payment to be made within 7 to 14 days. The plan should cover a period of two years or less. The ATO assesses each case based on compliance history and financial information. It’s important to consider the ATO’s Payment Plan Estimator to estimate payment arrangements and to use the Business Viability Assessment Tool for assessing the capacity to pay. Tailoring the proposal based on your business’s unique circumstances is essential. Remember, ongoing obligations such as BAS and Tax must be met on time to avoid defaulting on the payment plan.

What is the business viability tool?

The Business Viability Assessment Tool, developed by the Australian Taxation Office (ATO), is designed to help you understand whether your business can meet its debt obligations and continue to fulfill ongoing commitments. This online tool takes into account various financial indicators such as gross margin, cash flow, assets and liabilities, liquidity, and the debtor and creditor positions. It generates a report that gives an overview of the business’s viability. The information entered into the tool remains confidential and is not accessible by the ATO. For an effective assessment, it’s recommended to input three years’ worth of financial data, allowing you to spot trends or anomalies. In some cases, the ATO may use this tool to help determine a business’s viability, especially if there are outstanding debts or ongoing negotiations about payment plans.

The Business Viability Checklist: Ensuring Your Venture’s Success

Starting or running a business is an exciting endeavour, but it’s also a significant undertaking. To increase your chances of success, it’s crucial to assess the viability of your business concept and strategy. Here’s a comprehensive checklist to help you determine the viability of your business.

1. Market Research and Analysis

  • Have you conducted thorough market research to understand your target audience, their needs, and preferences?
  • Do you have a clear understanding of your competitors and how your business will differentiate itself?
  • Is there a demand for your product or service in the market?

2. Business Concept

  • Does your business idea address a specific problem or fulfill a need?
  • Have you defined a unique selling proposition (USP) that sets your business apart?
  • Is your business concept scalable for future growth?

3. Business Plan

  • Have you created a detailed business plan that outlines your goals, strategies, and financial projections?
  • Does your plan include contingency strategies to address unexpected challenges?
  • Have you identified potential risks and developed risk mitigation strategies?

4. Financial Viability

  • Do you have a clear understanding of your startup costs and ongoing expenses?
  • Have you projected your revenue and cash flow for the first few years of operation?
  • Have you secured adequate funding or investment to cover your startup and operating expenses?

5. Legal and Regulatory Compliance

  • Have you registered your business and obtained any required licenses or permits?
  • Are you aware of and compliant with all relevant local, state, and federal regulations?
  • Have you protected your intellectual property, if applicable?

6. Marketing and Sales

  • Do you have a well-defined marketing strategy to reach your target audience?
  • Have you set up sales channels and a sales strategy to acquire customers?
  • Are your marketing and sales efforts aligned with your budget and resources?

7. Operations and Management

  • Have you established efficient operational processes to deliver your product or service?
  • Do you have a capable and experienced management team in place?
  • Are you prepared for potential supply chain disruptions or operational challenges?

 8. Customer Feedback

  • Have you gathered feedback from potential customers to validate your business concept?
  • Are you open to making adjustments based on customer feedback and market trends?
  • Have you identified key performance indicators (KPIs) to measure customer satisfaction and business performance?

 9. Growth and Expansion

  • Do you have a growth strategy in place for scaling your business in the future?
  • Have you considered potential expansion opportunities or new markets to enter?
  • Are you prepared for increased demand and the challenges that come with growth?

10. Exit Strategy

  • Have you thought about your long-term goals for the business, including a potential exit strategy?
  • Are you open to selling the business, passing it on to a family member, or other exit options?
  • Do you have a plan for ensuring a smooth transition in the event of an exit?

Assessing the viability of your business is an ongoing process that requires careful planning, research, and adaptability. Use this checklist as a guide to evaluate and refine your business concept and strategy. Regularly review and update your plan to ensure your business remains viable and positioned for success in a dynamic market environment. Remember, viability is not just about surviving; it’s about thriving and achieving your business goals.