Our Bev answered some questions from Derbyshire business owners over on Twitter via AahDoDerbyshire. We thought it would be great to round them all up here …
Q: “What should I spend my bounce back loan on?”
A: Great examples that businesses we know are doing are:
- investing in that bit of kit they’ve been after to needed to help you compete better, or be slicker
- something that widens your lane, helps you pivot
- using it for marketing but watch your ROI
Please remember it is a loan, and loans are also down to risk appetite, only get the bounce back loan if debt sits comfortably with you, or its needed is our advice. It’s a fantastic opportunity to get low cost debt, but if you don’t have an appetite for debt, and you have no need for it in your business plan then it’s not always needed!
PLEASE talk to your accountant before taking money out of the business to pay for anything PERSONAL. Including holidays, cars or even if its just making ends meet (look at alternatives first including universal credits, mortgage payment holidays), there are big tax consequences! Please do not use it to pay for taxes that you owe, including CT or VAT. Get your accountant to organise Time to Pay arrangements with HMRC. Also avoid using the loan for normal day to day costs too. If you’re struggling to make ends meet speak to your accountant… insolvency laws are VERY tricky.
Q: “How can I improve my cash position?”
A: There are loads of way to improve your cash:
- Raise invoices quickly.
- Automate statements.
- Then perform some analysis:
- Check your T&Cs. How many days do you give to customers?
- Do you perform customer credit checks?
- Check how long you’re holding stock for.
- Are your overheads too high?
- Are your products / sales priced all wrong?
Other options include if you’re doing things differently looking at Tax Reliefs such as R&D, if you’ve made losses this year due to COVID19 then using these losses to offset against more profitable years and get some much needed cash back into your business.
Q: “With the summer self-assessment tax payments being delayed, do you think businesses will be expected to pay double payments in January?”
A: Yes! There will be a double whammy; Julys due, Januarys balancing figure due, plus your first POA for 2021/22. We’re hoping there may be some leniency and time to pay arrangements to help support those that need it.
Q: “What does best practice credit control look like?”
A: The idea is to reduce the risk your business is exposed to. So T&Cs, checking payment terms, reviewing credit checks, automating as much as you can, keeping an eye on who owes you money, don’t make an invoice a surprise!
We have some scripts available to any business owner (client of ours or not!) to help with credit control drop us an email on firstname.lastname@example.org if you’d like them.
If you have questions that we’ve not covered above the please don’t hesitate to get in touch with us, we’re happy to help business owners navigate their way through these stormy waters.