Work your accounts to get through tough times
As some businesses face a decline in their sales, we are being reminded to focus on our existing customers, manage debts, look after employees and maintain our marketing spend. But there are also some purely financial actions that we can take to make business a little less stressful. Wellers Accountants highlight some of their top financial tips for concerned businesses.
If you can get your accounts completed quickly after the year end you can calculate the projected tax payments for the business. Payments on account for unincorporated businesses can be reduced and reclaimed if you are confident of the final taxable profit.
It may be more attractive to have money owed to you by HMRC by overpaying or paying early for your taxation liabilities, rather than in a bank account. A review with your bank manager is essential to compare the rates of interest. This could also help to keep your deposits below £50,000, the threshold for government guaranteed deposits.
If you are likely to make a loss this year you can submit a carry back claim and reduce your current tax bill in some circumstances.
Make sure you are on top of your credit control, for example do credit checks on new and existing customers, consider interest on late payments and encourage customers to pay more quickly by giving discounts.
Review your own credit terms with suppliers and try to negotiate longer payment terms. If you don’t ask, you don’t get.
Asset purchases can be more difficult to fund at present. If you need new equipment consider leasing or hiring. In the long term this may be slightly more expensive but it will give you flexibility in the current climate.
Finally, even if you think your income will be too high to qualify, still register to claim tax credits. In the event that you do qualify, perhaps due to a bad debt, annual investment allowances (AIA’s) or unforeseen circumstances, the tax credits claimed now will then become payable. Otherwise the credits will only be backdated by up to three months.
Article provided by Wellers Accountants