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Action Items to Navigate a Tough Economy

There is a lot going on at the moment that is contributing to increased pressure and stress on household budgets and businesses alike. With rising inflation prompting several interest rate rises and increased cost of living pressures, many Australians are looking for practical, actionable ways to improve their situation. Here we have some action items that you can implement to navigate this tricky economy.

Action Items – Personal

If you’re feeling the pinch with your personal finances while the economy struggles, and the family budget is looking a bit strained, there are a number of action items you can undertake take to improve the situation.

Consider Refinancing Your Loans

For an example of a common short-term issue, you may find that interest rate rises have caused an increase in your home loan repayments. If this is the case, what better time to review your loans and make sure everything still stacks up. As a result of rising rates, many home loan customers are looking elsewhere for finance, and lenders are responding with attractive deals for new customers to entice them to switch. You may even find that your existing lender is willing to sharpen their pencils in order to keep you around. A broker (like the Finance team at McKinley Plowman) is your best port of call here to hunt around for the best deals and present you with options.

Debt Consolidation

You may also have a number of debts that are causing a headache – this could be home loans, personal loans, credit cards, tax debt – the list goes on! With repayments due at different times, at different interest rates, for different things, managing everything while keeping your cashflow in check can be difficult to say the least. Consolidating your debts into one loan can make payments easier and reduce the pressure on your family’s budget.

Optimise Your Tax Position

Looking at the long-term now, consider tax time. When you lodge your tax return as an individual, you may get little to no refund, or worse – a tax bill. An action item to consider for this tax year onwards is to maximise your deductions – handy to do no matter the state of the economy. Either you’ll reduce the amount that you owe the ATO at tax time, or even better, you’ll have more in your pocket after a healthy refund! Engaging a tax accountant and leaning on their expertise can help you optimise your tax position.

Diarise Recurring Bills

One thing that many of our clients find success with is diarising recurring bills as soon as one is paid. For example, you renew your car insurance on 1 July for 12 months. You then set a reminder in your phone for 11 months down the track, so you will have 1 month before the renewal date to shop around for other quotes, and ensure that you have sufficient funds to pay the premium. This will mean no nasty surprises, no headaches over scraping together some change to pay the bills, and enough time to look for a better deal (if one can be found).

Plan your Budget

Using a personal budget planning tool, like the one available for free on the MP+ Resources Page, can help you visualise your incomings and outgoings, work out where there is unnecessary expenditure, where you can tighten things up, and how much you can realistically commit to savings. Being diligent and disciplined in this area is challenging, but the rewards are amazing.

Action Items – Business

If you run a business, it will no doubt be impacted by the prevailing economic climate at any given time – whether positively or negatively. Looking at the economy as it is now, the impact will likely be negative. This is especially true for retail and other B2C (Business to Consumer) businesses, as household budgets tighten and discretionary spending is reduced, many businesses see their revenue tail off. There is also increased pressure on business loans, the repayments for which may be rising. Thankfully, there are some measures you can take as a business owner to streamline your structure, plan ahead, and increase lead opportunities.

Structure Review

As things change, particularly in the complex tax legislation landscape, it’s critical to think ahead and have your business structure optimised. If you’ve outgrown your current structure, you may have an opportunity to restructure into one that suits your current operations, while allowing for growth and maintaining (or improving) tax efficiency. A more tax-efficient structure means less money spent lining the ATO’s pockets, and more in your own. While the economy is in turmoil, consider a structure review as an action item for your business.


As the cost of most things rise, it is crucial that your business expenses are monitored closely, to ensure that you can absorb them or pass them onto customers if required. Three-way forecasts are an effective way to monitor and project forward your revenue and expenses. Undertaking a forecast will show you the impact to your bottom line of rising costs and other overheads, allowing you to make better decisions about things like pricing, cost-cutting, or business processes.


As a business owner, knowing how your business’ costs and revenue stacks up against your competitors can be great information to turn into sustained competitive advantage. Benchmarking data can help you get that information. There are a wide range of financial resources that can help you ascertain key statistics, margins, and ratios for certain industries, allowing you to compare your business against others in your industry. From here, you can identify key areas where you are excelling, and others where improvements could be made.

Accounts Receivable

With many businesses struggling and insolvency on the rise, it is critical to ensure that you have a good grip on your accounts receivable. Increased debtor days and bad debts from companies that owe you money can put you in a precarious position yourself, so having a robust collection procedure and clear payment terms is important. Some businesses offer a small discount for upfront payment, so depending on your margins, this may be an option for your business. A small reduction in margin now can save issues with no payment down the track.

Negotiate Trading Terms

“Everything is negotiable”. Well, perhaps not everything, but in this economy, an action item for your business can be to just aski the question to potentially reap the benefits of a more efficient and cost-effective arrangement. As an example, you could negotiate with your suppliers for volume discounts – buying in bulk to save on the per-unit cost. Leveraging scale in the manner can have a tangible positive impact on your bottom line.


With a hyper-competitive recruitment market and candidates holding the cards at this stage, many businesses, particularly those in professional services, are leveraging offshore teams. Where the roles dedicated to offshore team members were once the entry-level positions, more and more senior roles are being filled by these employees. The cost benefits are one significant upshot, as well as opening up a larger pool of talent from which to select your next hire.

Marketing & Branding

While consumer spending might decrease in a tough economy, there are some items you can action now that may help you stabilise your leads, or even increase them. Consider what people need right now when spending is under scrutiny – they need value. No matter what products you sell or services you provide, ensure your marketing messaging communicates the value of your product. This could include why the customer will save money in the short term or long term; why your product is superior (and therefore worth the money); or what value they’ll get from the product or service that is more important than the price they’ll pay.

Next Steps

The present circumstances won’t last forever, but it seems likely at this stage that they will stick around for a while. This is why it is so important to ensure that you are doing what you can to optimise your personal and business finances, and not only survive these tricky times, but even prosper. We have also developed a comprehensive outline of how each McKinley Plowman service, and the teams who deliver them, can make a positive impact. You can view that page here.

If you’d like to discuss further how McKinley Plowman can support you in this, don’t hesitate to call us on 08 9301 2200, or contact us via our website.

written by:

Prior to forming McKinley Plowman, Nigel specialised in management consulting and international accounting, enjoying success in Australia and in the United Kingdom. His extensive experience in management consulting, international accounting and innovative tax structures has been a major driver in the success of McKinley Plowman as well as the many businesses he has steered towards new levels. Nigel is dedicated to fast-tracking his client goals with cutting edge tax and business strategies. He is a member of the CPAs and the Taxation Institute of Australia and enjoys developing tax strategies that work well here and around the world.

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