Time for action
Here are seven steps that can reduce any impacts on your profit margins and capitalise on any opportunities.
1. Review current expenses and those incurred over the past financial year to identify energy intensive costs affected by energy price rises. Direct costs may be fuel, electricity and gas, and indirect costs may be business travel, freight and waste removal.
2. Gain a deeper understanding of where additional costs are beginning to be incurred via your supplier channel and can be expected to rise.
3. Explore potential cost savings you can make by reducing your consumption of goods and services directly (eg, electricity) and indirectly (eg, freight) affected by the carbon tax introduction.
4. Delving deeper into energy costs, conduct an energy audit to measure your business’s carbon footprint and identify ways in which you can reduce your energy consumption and costs. Look for lower-carbon alternatives – you will find businesses will soon better promote their sustainability credentials, which should help you make more informed decisions.
5. Review your key business processes and identify areas where you could be operating more efficiently by changing them, such as upgrading equipment to reduce energy consumption and re-training staff on more carbon-friendly practices.
6. Analyse your current pricing and how the additional costs may impact your profit margins. This will give you the confidence you need to justify price increases, not only to your customers but also to the Australian Competition and Consumer Commission (ACCC) if asked. The ACCC has produced the Carbon Price Claims – Guide for Business to help businesses understand their rights and obligations, ensuring price increases are not misrepresented as being the result of the carbon tax.
7. Ensure your payroll software is up to date so that the carbon tax changes are seamless.
