Your income is important to you, so naturally you want to protect it. Having a risk management strategy to help protect your finances can help. Some of the protection strategies to consider include:
Take out insurance
Business interruption and income protection insurance can be extremely valuable under difficult circumstances. As a business owner, consider how dependent your business is on you and what would happen in the event you could not work.
See Types of insurance for more information on the different types of insurance available.
Secure your data
Proper data security procedures are important to ensure you are protected against hackers and other malicious data attacks. If you use the internet for online banking or other business functions, it's important to have up-to-date virus protection, secure networks and firewalls, as well as secure password protection procedures. If you're unsure how to do this on your own, talk to your internet service provider.
See Keep online business activity safe and secure for more information on securing your business.
Check the Personal Property Security Register (PPSR) before you buy
Before you buy expensive second-hand goods for your business, such as machinery, equipment, vehicles or stock, make sure they’re debt free. If you buy something that has a debt still owing on it, it can be taken from you by creditors.
Searching the PPSR can help you find out whether your new purchase has debt still owing on it. The PPSR is low cost, easy to use and returns results straight away.
Register with the PPSR before you sell assets
Selling assets can be risky if you’re unable to collect full payment up-front. By registering an interest in goods that you’re selling, you’ll have a better chance of recovering the debt if your buyer doesn’t pay or becomes insolvent. This is useful if you’re selling on terms, such as retention of title, or leasing out valuable goods.
You can register your interest in personal property through the PPSR. Examples of personal property you might want to register include:
- plant and equipment
- vehicles, including boats and planes
Secure against fraud
Some of the actions you can take to protect your business against fraud include:
- develop an emergency management & recovery plan
- secure your cheque book
- separate your financial responsibilities
- regularly monitor your financial activities
- educate yourself and your employees on fraud awareness.
Beware of scams
The list of financial scams is endless, so the best way to protect your business is to stay informed and if something sounds too good to be true, do some research before you hand over any money.
For a list of common small business scams and tips on protecting your business, see our Small business scams page.
Use registered professionals
As a general rule, any business providing you with a financial product (such as a loans, superannuation, insurance or investments) or financial advice about a financial product (such as a brokerage service, accountant or financial adviser) should be licensed.
You can check the Professional registers on Australian Securities and Investments Commission (ASIC) Connect website. MoneySmart also has a useful page on Companies you should not deal with when seeking investment or loan advice.
Protect your deposits
If you deposit your cash in the bank it's a good idea to check that it's protected. See the Government guarantee on deposits page on the MoneySmart website for details.
The article was first published on business.gov.au