Taking Control of Cash Flow

25 March 2020 - Elizabeth Nichols

Current events are moving quickly and more and more businesses are starting to suffer the effects of the Covid-19 outbreak, either directly or indirectly.
Over the coming months taking control of cash flow will become essential. We can assist you will this process and would work through the following process:

  • Preparing a high level rolling 12-week cash flow recording income and expenses. This will help you keep on top of your requirements and you will be able to identify the points in the future where you may need to manage payments more carefully or seek additional help/funding
  • Helping you access the help being provided by the government to delay tax payments. Any VAT payments due before 30 June 2020 are automatically deferred and no application is needed, although if you pay by direct debit, you will need to cancel this. Employers are also able to defer PAYE/NIC or corporation tax liabilities by phoning the HMRC Coronavirus Helpline (0800 0159 559).
  • Ensuring you access the grant support available (there are grants of either £10,000 or £25,000 available from local authorities).
  • Ensuring you benefit from the business rates holiday for the 2020/21 tax year (it has been announced for businesses in certain sectors).
  • Reviewing costs in the business to see if there are any non-essential expenses that can be deferred until trade resumes, particularly direct debits and standing orders.
  • Supporting your approach to your bank to discuss payment holidays for lending facilities (either business or personal) as well as the Coronavirus Business Interruption Loan Scheme where the government guarantee 80% of the debt and pay the interest and fees for the first 12 months.
  • Supporting negotiations with your landlord to discuss a holiday for rent payments. Part of the government help introduced is that landlords are unable to evict commercial tenants for non-payment of rent between now and 30 June 2020, but it is advisable to speak to them first.
  • Reviewing your levels of staffing, particularly if turnover has decreased. If you have spare capacity helping you to consider using the new Job Retention Scheme to obtain a grant to help with the ongoing wages cost.
  • Preparing a communications plan to keep in contact with your customers. They will also be under pressure so may well be deciding who to pay first. Preparing a similar plan for suppliers.
  • If you are considering delaying payments to suppliers, be careful especially with those that are critical to the continuing trade of the business. There may also be a risk to the reputation of your business with delayed payment.
  • Supporting you in considering alternative sources of supply, should you need them in the future.

Finally, being your trusted adviser at this time. If you need to take action it is better to do this sooner rather than later and it is important to document any measures you are taking within the business, particularly if you are applying for additional funding. New initiatives are being introduced by the government to help businesses and individuals on an almost daily basis and we are well placed to be able to advise.

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