By now, businesses are starting to understand the impact that coronavirus is going to have on our economy, and on various sectors. For some that impact is already being keenly felt, such as in the hospitality and leisure industries. For others, it is only a matter of time.
However, now is not the time for companies to bury their heads in the sand and wait for it all to be over. This is the perfect time to look at what you can do to minimise the damage likely to be caused by the pandemic and put some resources into place to keep your finances on the straight and narrow.
A recent package of government support measures, announced by Chancellor of the Exchequer Rishi Sunak, goes some way towards helping businesses stay afloat, and there are a number of other things that organisations are starting to do in order to bolster their profits for the coming months.
Whilst there will still be plenty of difficult decisions that need to be made in the coming weeks, now is the time to see what you can do to improve your cash position and make preparations for the hardships that are likely to occur later on.
Here are some of the most practical actions that small firms can take right now.
Delay Tax Payments
HMRC are willing in some cases to delay or defer tax payments in order to help small businesses to manage their cash flow. You can call 0800 0159559 to speak to HMRC today.
Get Debt Support
Most businesses will face a crisis in the form of debts in the coming months, as payments become due whilst business is slow. There are plenty of debt advice sites and phone lines available to support companies at this time, and your accountant or financial adviser can also provide you with solutions.
Look Into Loan
This is actually one of the easiest times to get a business loan, thanks to the Coronavirus Business Interruption Loan Scheme (CBILS). The scheme was recently launched as a way to help businesses to access a range of financial products, including loans and overdrafts, to ease their financial worries during the COVID-19 crisis.
Whilst the borrower is 100% liable for the debt, the government has promised to provide lenders with a guarantee of 80% on any lending in order to give banks and lenders more confidence in providing finance to smaller firms. It is important to note that there can be no requirement for director guarantees for loan amounts under £250,000.
Business Rates Relief
For High Street businesses in England, including all retail, leisure and hospitality businesses, there will be no business rates due in 2020-21. This will automatically be applied to your council tax bill in April 2020.
Apply For Job Retention Support
All UK employers are able to access grants from the government to cover part of their employee’s salaries during the crisis, in order to retain staff that otherwise would have had to be laid off. HMRC promises to reimburse 80% of furloughed workers wages, up to £2,500 per month
For businesses who want to continue working and providing services throughout the pandemic, and whose work is conducive to an online environment, there may be ways to carry on some aspects of your business. Shops and restaurants may be able to provide an online delivery service, whilst others can provide services via email or video chat.
Some companies are even hosting events, setting them up online so that people can pay to watch and take part. There are plenty of apps and other technologies for this, including Facebook Live, Zoom, Microsoft Teams, Google Hangouts and IGTV on Instagram.
Prepare Your Cash Flow
One of the most critical measures that you need to take now is to prepare your cash flow so that you are fully aware of where you stand and are able to work out what package of support you might require in the future.
Address Your Financial Situation In Full
You need to look at the full picture of your business’s financial health, and make a report that demonstrates a clear understanding of your own finances. In order to obtain government or bank support and lending, you will need to provide records that show that you are in control of and understand your cash position.
Get Some Cash In The Bank
Whilst it is important under normal circumstances to have a good mix of cash and assets, in the current climate it makes sense to ensure that your bank accounts have sufficient liquidity to cope with the ensuing weeks and months.
Sell any unwanted assets in order to top up your bank accounts, and try to call in debts now, whilst other companies and organisations are still able to meet demands.
Keep Taking Orders
Whilst it is unfair to take money for services that you aren’t 100% certain that you can fulfill, you should still be taking orders that you know that you can see through, and take payments for existing customer orders that are already in process. Keep a close eye on your orders, though, and don’t allow yourself to get carried away if you are unsure at any point that you will be able to meet demand.
You may be one of the lucky businesses that is able to practice remote working, and is thus able to carry on somewhat in the same capacity as before, with a few minor changes. However, it is critical that you ensure that you put measures in place to ensure that staff have everything they need to do their jobs remotely (such as the right software and equipment).
You should also be monitoring your employees to see how they are managing workloads and working from home. This information will help you should you decide to use the Job Retention scheme.
Apply For Government Support Sooner Rather Than Later
In the current climate, it is fair to assume that a majority of businesses will be looking for some form of support from the government, to ease their financial worries. Once you have all of your information ready, make your application for government support as soon as you can, as it is likely there will be some backlog over time.
Not Sure Of Your Next Move?
These are unprecedented times for our country, with the Government being forced to “slam on the brakes” on the economy in order to tackle the current crisis.
Many companies have gone into enforced hibernation and are waiting to see how a post Covid-19 economy operates, before they take the risk of opening up and trading again in some capacity. With the protection of cash and assets being the current priority of most company owners, it is no surprise that trade has reduced dramatically.
The longer this uncertainty continues the more likely it is that more companies will need government assistance to survive. If you are not sure of the next move for your business and want some advice then please get in touch with An Accounting Gem Limited on 01473 744 700 or email us on email@example.com for further assistance.