Flood Recovery & Relief

Flood Crisis Management

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In the immediate aftermath of a disaster such as the floods, the focus is on stabilising your business to ensure it can continue to operate or return to operations as soon as possible.
Disaster Recovery & Relief
Disaster Recovery & Relief
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It is only after this period of crisis management that attention can move to address the longer-term financial and business implications flowing from the disaster.

The chaos that follows a disaster that has impacted your business is a challenge and it is difficult to determine and focus on the priorities whilst responding to the demands and resulting emergencies that seek management’s immediate attention. It is often difficult to identify what is most important, let alone how to deal with these issues and where and how to seek assistance.

There are critical areas that must be addressed to stabilise a business and to enable a return to operation and ultimate recovery. These may differ in priority for each business however there is a common base. We consider the critical factors to address include:

Cash flow planning

Cash is the oxygen of every business and it is crucial to consider your short-term cash flow requirements and evaluate how these needs might be met. In reviewing your cash flow requirements you may need to consider:

  • Your customers and their ability to meet their debts to you or associated trading terms
  • Your ability to honour debts due to your suppliers and creditors
  • Your people and payroll needs
  • Your available banking or finance facilities and financial arrangements
  • Your banking/borrowing covenants
  • What assistance is available to you

It is important to establish a sustainable cash generation strategy that aligns with your business's immediate needs. You will need to revisit your cash flow forecast and ensure you take into account the potential for reduced sales and/or higher costs and delays in supplies and services. Further, you ought to address sourcing government grant assistance, taking advantage of concessions offered by government agencies to disaster-affected businesses (for example, ATO lodgement and payment deferrals), deferring or re-prioritising (where possible) major items of expenditure and reviewing your commitments to your customers and suppliers.

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Grant Thornton can also assist you in dealing with your cash flow needs, whether it is organising and quantifying them or in addressing your position with the ATO, government or your financier.


Your employees may have been impacted by the disaster and support for your people at this time can be critical to the recovery of your business. Consideration should be given to ensuring staff are able to take an appropriate amount of time off work (both when directly affected and also to participate in voluntary clean-up activities where appropriate), providing support services such as Employee Assistance Programs, and ensuring premises and work sites are safe. The Fair Work Ombudsman has released an update here, including information on employee leave entitlements and instances where employees may be stood down due to business closure.

Other factors to consider include actively managing your workforce to preserve working capital, ensuring employees are focused on tasks that provide the greatest benefit to your business, and being mindful of potential legal obligations and responsibilities to your employees. Above all, it is extremely important to communicate effectively with employees at times of crisis, to ensure that they remain focused on the things that matter to your business, and to ensure that a lack of information is not filled by counterproductive speculation and rumour.

Mental Health Support

We understand many people in flood-affected areas might experience high levels of stress, anxiety, and depression after experiencing traumatic events such as flooding, bushfires or a natural disaster. This is a normal reaction when experiencing trauma. It’s important to look after your mental health and seek help when necessary. 

Below are some mental health resources:

Customers and clients

Businesses should consider how the floods have impacted key customers, as disruptions to the sales pipeline may have significant adverse impacts on cash flow. Many of your customers and clients will be facing the same issues as you. It is appropriate to engage with them to discuss:

  • The fact that you are or will be open for business and any special conditions they should be aware of in dealing with you.
  • How the floods have affected their business.
  • Their ability to pay amounts due.
  • A review of existing credit terms and or new terms is required in the interim.
  • Their future requirements in terms of what can be expected for future orders and demand.
  • Consideration should not only be given to those customers directly impacted but also to those indirectly impacted (including customers of your customer, etc).


Your suppliers may also be affected by the floods and consideration of how they have been impacted is important given the potential disruption to your supply chain and the resulting potential adverse impact on cash flow. It is appropriate to engage with them to discuss:

  • Your ability to pay amounts due to them.
  • A review of existing credit terms and or new terms is required in the interim.
  • Their ability to continue to supply you.
  • Resulting in price changes that could impact you.
  • Consideration should not only be given to those suppliers directly impacted but also to those indirectly impacted (including suppliers to your supplier, etc).

Force majeure

Most businesses have important long-term contracts that impact their relationships with suppliers and customers. Many of these contracts contain “force majeure” clauses that protect the parties in the event that a significant part of the contract cannot be performed due to factors, like a natural disaster, that are outside of the control of the parties.

Businesses need to carefully consider how force majeure provisions may impact upon their key contracts. Aspects to consider include whether the force majeure provisions excuse, or merely postpone the contracted commitments. Working proactively with your customers and suppliers can help to alleviate the practical and potential legal issues.

Businesses will also need to consider the impact of contracts that do not contain force majeure clauses, as these contracts may present even more pressing obligations. Consideration should also be given to the appropriateness of current contract wording for all future businesses.


It is at these times that insurance really matters. A successful claim can be make or break for a business that has been devastated by the floods. It is therefore critical to know what cover you have and to be able to make a claim as soon as possible.

In this regard, the starting point is to locate your insurance policy and review its terms. Contact your Broker or Insurer to request a full copy. It is important to review the document and discuss with your Insurer or Broker the terms of your policy and your eligibility to make a claim and the information required to support your claim.

Many business policies may include a provision for claims for loss of trading profits in addition to the general claims for property, equipment, stock and fixtures. 

A claim for any loss should be submitted to the insurer for their consideration, regardless of whether you believe your policy does or does not cover you for the loss you have sustained.

Grant Thornton can assist you to manage through this disaster and support you in responding to the challenge and addressing the critical factors outlined above.