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5 tips on getting your business into financial shape

5 tips on getting your business into financial shape

Well what a week last week was. Each day was different and from going from a healthy business you may be looking at having to layoff employees and losing work.

Let’s all be clear this WILL end, Although we’re not sure when it will.

As a business ourselves we’ve been reviewing financially how it will impact us and feel that our top tips may help others.

These are our top 5!

1 – Cashflow

Keeping up to date with your financials is always crucial to any business owner.

Understanding your cashflow is king! LOOK at it now! Understand some scenarios from the good to bad so you know when you must make key decisions.

If you are suffering cashflow issues, then:

  • Talk to your suppliers now to negotiate payment plans if you believe you are not able to meet your agreed credit terms
  • Chase customers for any outstanding debt which is due or falling due
  • Get those invoices out early
  • Speak to your bank about any loan holidays
  • If in your employment contract you could make layoffs or reduced working hours which now has the possibility of help from the government
  • Review the help you can get from the government

2 – Location of company assets

If staff are working from home and you have provided the equipment (computer / laptop etc) then it’s worthwhile keeping an inventory of who has taken which piece of equipment detailing serial numbers and make and models.

Check your insurance is covering all the equipment in the different locations.

3 – Keep updated on the situation from the Government

The government are releasing daily updates on what support is available for all businesses and employers. Keep on top of it. There is advice surrounding

  • Sick pay to employees
  • A payment holiday on rates
  • Loans such as the ‘Coronavirus Business Interruption Loan Scheme’
  • Furlough of staff for up to 80% of pay and you are not required to pay the other 20%
  • Stop your VAT Direct Debit
  • And more each day

4 – Payments to staff working from home

If your staff are working from home, you may have to pay additional payments to cover their electric, heating and phone bills. It is capped at £3.00 per week and can be paid within the payroll. You may need to make additional reporting on a P11D – due annually on the 19th July.
https://www.gov.uk/expenses-and-benefits-homeworking

5 – digitalise your bookkeeping

This will help you with your cashflow forecasting so spend the downtime to doing some of the following

  • Receipts auto scanned
  • Connect your bank feeds
  • Use a product like Zoho books that you
  • Centralise your accounts information by creating something like [email protected] for supplier and customer emails

 

Useful information and links:

Keep checking this page for eligibility for Government help
https://www.gov.uk/government/topical-events/coronavirus-covid-19-uk-government-response

Article from the Financial Times that explains things in a little more detail: https://www.ft.com/content

A good article from the Institute of Chartered Accountants in England and Wales