We thought it would be useful to provide some advice on how to manage business finances to help get your business back on track.
- Look at your customer base and consider any potential customers who may struggle to pay. With these customers you may wish to obtain deposits/set up payment plans to limit the risk. Credit checks may also be a good idea.
- Cut back costs. Now, it is more important than ever to evaluate your overheads and really focus on your cash flow. Try and agree the most favourable credit terms with your suppliers to relieve some pressure, especially in the first few months of operating back at full capacity.
- Consider personal salaries and drawings. As a director or a proprietor of a business you may want to be more cautious of what you are drawing out of your business whilst there is still so much uncertainty with the Pandemic. You can always increase dividend levels and drawings later down the line.
- Many businesses will have made losses in the last tax year, so make sure you speak to your accountant regarding tax relief on carry back of losses.
- Ensure your business finances and books are kept up to date, especially your outstanding debtors!
- Make sure you are aware of your banking circumstances/covenants in place. Banking pressures will come. Some banks are already dropping out of factoring and becoming stricter on overdraft arrangements. Ensure you have long term plans in place for borrowing etc.
- With the furlough scheme set to end next month, it is also paramount to consider the logistics and well-being of employees as they return to the work place. It is also important to ensure the final furlough claims are submitted timely and calculations are correct. HMRC have ongoing compliance interventions in place to protect or recover funds lost through fraud, tax avoidance, evasion and non-compliance. Ensure your calculations and submiss-ions are correct and you have the relevant support, should you have an inquiry.
Other Covid Related Support points
Those businesses who took out Bounce Back Loans will now have started making repayments, after the 12-month interest free period. Look out for ‘Pay as you Grow’ which gives more flexibility on the repayments.
Check out ‘Business Wales’ for the most up to date Covid grant support schemes.
The fifth SEISS grant has more specific criteria, details for this can also be found on the Business Wales website www.businesswales.gov.wales
As always if there is anything you wish to discuss with us at Allchurch & Co, please get in touch we would be happy to help.
Allchurch & Co Chartered Accountants / www.allchurchco.com / firstname.lastname@example.org / 01792 439438