We know finances are a massive worry for a lot of people right now, but as business owners there are things you can do to try and save money during this time.
REVIEW YOUR PURCHASE STRATEGIES
Review your purchase strategies to see whether they are needed and whether they will add value to your business. By reviewing your purchases, you may identify you have no further need for some products such as specific insurance policies, support packages, software or marketing activities. For example, marketing done correctly can break you out of a rut, lead to sales and help with cashflow. However, it’s important to revisit your marketing strategy to identify if you aren’t getting positive returns for your money
REVIEW THE PRICES THAT YOU PAY
Review the prices that you pay by getting into the habit of getting quotes, shopping
around for better deals and always asking for discounts. Also always look at comparisons for energy suppliers. You could save a fortune by switching.
MANAGE STOCK LEVELS
Keep your stock levels as low as possible to save on tied-up cash and storage costs
SAVE ON LARGER ANNUAL BILLS
Make regular payments to accountants etc. to save on larger annual bills and ensure
that you know and diarise your larger liabilities such as payroll, taxes or other expenses.
ENSURE YOU ARE ON THE BEST VAT SCHEME
Ensure that you are on the best VAT scheme that suits your business needs. Usually, the amount of VAT you pay to HMRC is the difference between the VAT on your sales invoices and purchase invoices. You report these figures and pay money to HMRC even if you haven’t been paid for all the invoices you have raised. With the Cash Accounting Scheme, you pay VAT on your sales when your customers pay you and you reclaim VAT on your purchases when you have paid your supplier. Not all businesses are able to do this so you will need to speak with your accountant or HMRC for advice.
CONVEY THE IMPORTANCE OF CASHLOW TO YOUR EMPLOYEES
Communicate how important cashflow is to your employees. Sales staff should ensure
that sales invoices are paid in full and on time and project workers should ensure that projects are completed within budget and within the necessary parameters to avoid any late penalties.
HAVE A LINE OF CREDIT ON STANDBY
Having a line of credit on standby with banks or other financiers can help you boost your cash flow which can be a lifeline for small businesses looking to bridge the gap between ‘ticking along’ and ‘high growth’. You could look at securing a business loan or getting yourself a business credit card and using it responsibly. Whilst this can boost your cash flow it may also help you build an all-important business credit rating