What can UK businesses do to navigate their way through the current financial climate!?
Article original published in Issue 6 – JT AccountS Newsletter
The World Economic Forum has identified the cost-of-living crisis as the number-one global risk for the next two years. The crisis is manifesting in myriad ways: exponential energy bill increases, double-digit price rises in telecoms, mortgage rate hikes, staple food price inflation. People across the UK are experiencing a fall in disposable income, increasing levels of debt and ultimately a fall in living standards. If 2022 was a prices crisis, 2023 may become a debt crisis for many. The crisis is also affecting those with higher incomes – people working full time and earning salaries well above average income are struggling to pay their bills and businesses are feeling the huge impact of regular interest rate increases, a squeeze on business funding etc.
What can UK businesses do to navigate their way through this?
• Cash flow – increasing your cash flow is KEY! One way to increase it is to ensure your debtors pay you on time. Do you have a credit control system in place to ensure this happens? If not, we may be able to help.
• Manage your costs better – you must be penny smart in today’s environment. There are several ways you can do this including drawing up a budget and sticking to it, seeking out tax reliefs and not automatically renewing premiums. Check what else is out there.
• Avoid any unnecessary charges for finance – you can lose hundreds, even thousands, of pounds each year by going over your business credit card limit and being late with loan repayments. By staying on top of bills and paying them on time, you can avoid such interest charges. Keep a schedule and set up alerts to remind you when payments are due, automating as much of this process as you can.
• Tap into business funding – do you know what funding is available out there and what is appropriate for your business? When looking into this, you need to consider what assets you have available to back the funding as you will be asked this. For example, you may qualify for small-business rate relief on your property.
• Digital payments – are you making it easy for your customers to pay you by making digital payments available to them e.g., Stripe or Go Cardless?
• Focus – are you focusing enough time on your business to drive sales and generate growth – think about outsourcing your payroll as this can be quite time consuming at the end of every month. Outsourcing will free up some of your valuable time. Again, we can help with this.
• Future-proofing your business – in volatile times like now do you have a `business risk register’ to help you anticipate and overcome challenges with confidence? For example, what if your costs go up by 10% in your key product lines or your business funding gets squeezed even further – think about what’s going to hurt your business as well as what’s going to kill it and have a plan in place so that you don’t have to react in the moment and risk making costly last-minute decisions.
• Making Tax Digital – perhaps now is the time for you to go fully digital in terms of how you provide your company data to us so that we can use that to give you an insight into cash flow forecasting to help your business (we are able to offer this via QuickBooks) as well as to provide you with analytics to help you make informed business decisions going forward. Speak to us about going fully digital.
OTHER NEWSLETTER TOPICS IN ISSUE 6:
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Related Newletters and Articles:
THIS NEWSLETTER TOPICS: Helping businesses tackle the current financial climate! – Director tax-efficient salary recommendations – The New Basis Period Reform – Voluntary National Insurance Contributions – Today not Tomorrow!
Director tax-efficient salary recommendations, when is comes to starting a limited company.
Voluntary National Insurance contributions can help make sure you have enough qualifying years to get the full State Pension. You need to make full contributions for a total of 35 years to obtain a full state pension.
Practice Number: 21331
Jacqueline Tetley is licensed and regulated by AAT under licence number 5096.