Clearing the backlog at the counter: resetting a regional café/post office

CASE STUDY:

Industry: Hospitality / Retail
Location: Hunter region, NSW
Employees: Five staff plus director
Annual revenue: Increased from ~$250,000 (FY23) to ~$450,000 (FY25)

A long-established café and post office serving its NSW Hunter Region community found itself under mounting financial pressure, despite improving trading conditions and steady demand. With five employees plus the director and revenue increasing from approximately $250,000 in FY23 to around $450,000 in FY25, the business remained viable – but legacy compliance issues were holding it back.

“This was a business that was fundamentally sound, but burdened by problems from earlier years,” says Emma Mos, Partner at Jirsch Sutherland. “Our role was to help draw a line under that history and put a practical structure in place.”

Background: when compliance gaps quietly escalate

The director acquired the business in 2018 and initially traded steadily. However, like many hospitality operators, COVID-19 shutdowns and restrictions placed sustained pressure on cash flow.

During this period, inadequate bookkeeping support meant broader compliance obligations were not met. BAS lodgements fell behind over an extended period, and the issues were not identified or addressed early enough at an accounting level.

When a new accountant was eventually engaged, historic lodgements were brought up to date. While this was essential, it also crystallised a significant Australian Taxation Office (ATO) liability. Although the director entered into payment arrangements and made regular payments, interest meant those payments largely serviced interest rather than reducing the principal debt.

“The director was engaging and paying, but the numbers weren’t moving,” Mos explains. “She was effectively treading water.”

The solution: certainty through Small Business Restructuring

Jirsch Sutherland was appointed to guide the business through the Small Business Restructuring (SBR) process. From commencement to approval, the process took seven weeks – four weeks to prepare the plan with the director and her accountant, followed by a three-week creditor acceptance period.

“Early engagement with creditors, including the ATO, meant support was confirmed quickly,” says Bradd Morelli, National Managing Partner, Jirsch Sutherland. “As a result, we were able to advise the director before Christmas that the plan was likely to be approved.”

The approved plan delivered:

• Monthly payments broadly in line with what the business was already paying
• A fixed two-year plan term
• An estimated return to creditors of approximately 30–34 cents in the dollar
• An end to the cycle of compounding interest and uncertainty

“Being able to give the director clarity before the end of the year made a huge difference,” says Morelli. “Instead of ongoing stress, she had certainty and a way forward.”

Results: relief and renewed focus

The emotional impact on the director was immediate. With the plan approved, the pressure of an ever-growing tax balance lifted, allowing her to focus on running the business.

“There was enormous relief,” Mos adds. “Knowing the debt would actually be dealt with rather than endlessly deferred allowed the director to move forward.”

The plan commenced in January 2026 and at time of writing, the first payment had been made, trading was tracking in line with forecasts, and all staff were retained.

A critical reminder for small businesses

This case also highlights the importance of having bookkeepers and accountants who are properly registered, compliant and proactive. “Compliance issues rarely become critical overnight,” Mos notes. “They build quietly. Business owners need advisers who don’t just process transactions but actively help them stay on top of their obligations.”

Outcome at a glance

• Business continues trading as a going concern
• Employees retained
• Creditors receive a better and more certain return than liquidation
• Director regains clarity and confidence
• Historic tax debt is finite and manageable

“This is exactly what the SBR regime is designed to do,” Mos says. “It gives viable businesses a genuine second chance.”