10 ways to improve your business cash flow

10 ways to improve your business cash flow

For a business to grow sustainably (and to successfully make it through the financial bumps in the road), cash flow needs to be a priority. And not just when times are tough and cash is tight. Making sure that you’re maintaining an optimal level of cash on hand at all times; is essential to success. So how do you do this? To improve business cash flow in the immediate but also for the long-term, here are 10 essentials.

  1. Know your break-even figure – you need to know what number you need to reach each month to cover all of your outgoings. Once you know this, you can make better spending decisions and keep your cash flow at its optimal level. 
  2. Create a budget and stick to it – while profit is important, you also need to focus on spending. Create a budget to ensure that you’re making more on each sale than you’re spending. This can help you be more mindful about where your money is going. It can help you make impactful changes. 
  3. Build a cash reserve – set aside any excess money you make every month into a business savings account. Financial experts recommend keeping 3-6 months’ operating expenses in a cash reserve. However, you can decide how much you want to keep available.
  4. Automate your bookkeeping – using software such as Xero and QuickBooks can help you improve your cash flow. You can send out invoices immediately, get your clients to pay via Direct Debit, reconcile payments easily, and generate reports with a click of a button.
  5. Offer discounts for early payments – if you have certain clients who pay late and miss payments, offer them a 2-5% discount if they pay early. Not only does this incentivise them to pay, but it also ensures that you don’t suffer from dips in your cash flow too. Win-win.
  6. Negotiate extended payment deadlines with vendors – it’s good to set up extended payment deadlines in the event that you can’t pay what you owe vendors right away. For example, you could negotiate a 60-day turnaround for all payments or include a clause in the agreement that allows later payments a certain number of times in the year. While it may not be needed, it is good to be prepared in case you ever need to use this option.  
  7. Consider financing (when it makes sense) – your focus should be building up a cash reserve for emergency situations like the Coronavirus crisis. This means that, in a situation where you have unexpected expenses or you need a large sum, you should consider short- or long-term financing options instead. 
  8. Consider leasing supplies, equipment, and real estate instead of buying – while leasing may end up being more expensive than buying in the long run, choosing to lease supplies, equipment, and real estate for a certain amount of time will help you to maintain a steady cash stream for day-to-day operations. 
  9. Seek advice from an accountant – the best way to improve your cash flow is to seek expert advice. Whether it’s getting an accountant to advise you on spending and saving or hiring them to completely manage your financial matters, they will help you make the right financial decisions. After all, you have to spend money to make money!
  10. Improve your inventory – what is your inventory turnover? Surprisingly, there could be a lot of cash tied up in your inventory so check your inventory regularly. Are you buying too much? If so, sell it at a discount and start buying less of it. This is something that your accountant can help you figure out.

To sum up: 

While it’s obviously very important to improve business cash flow right now (thanks Coronavirus), it is also essential for your business to have a healthy cash flow all year round. Keeping a robust cash flow takes vigilance. But it will help protect your business during turbulent times, not to mention, it will also help you sleep soundly.

Zyla accountants have recently partnered with Fluidly to help small businesses wonders to raise funding within a fraction of time. Book a call with our experts to know how we can help you!

Call us on 0203 468 2241

Email us at [email protected]

How do the changes to R&D tax credits affect small business owners?

How do the changes to R&D tax credits affect small business owners?

Many new businesses and start-ups usually overlook the importance of claiming R&D tax credits. They don’t realize that it can provide valuable support for startups and growing businesses. 

And at Zyla Accountants, we’re experts in claiming R&D tax credits.

Thus, assuming you’re new to R&D tax relief; this blog is the overview you need. Or assuming you’ve already claimed, it’s an ideal opportunity to monitor enormous changes introduced in the Autumn Budget 2021.

R&D tax credits in 2021: Things that have changed!

The recent report shared by HMRC shows that there was a 16% rise in R&D tax credit claims for the year ended in March 2020. This boost indicates that SMEs are gradually starting to realise the importance of this credit as part of the tax saving.

In the Recent, Autumn Budget and Spending Review, Chancellor has introduced two vital changes to the framework:

  • Changes in relief measures: R&D expenses referred to as ‘data and cloud costs’ will be considered under the relief, a change that has been widely welcomed.
  • Claim only in the UK: a less needed development is that organisations should now have to do their R&D work in the UK for it to qualify.

Good thing: addition in the scope of claimable expenses!

TechUK (the UK’s innovation trade organisation), had been vocal about the addition of some things in the scope of R&D tax credits, like, data and cloud costs for the last 4 years. 

Following a full-scale interview in March 2021, the UK Government has considered their words and has agreed to extend the scope to cover data and cloud-related costs from April 2023 onwards. Things that have been included are: 

  • Digital transformation projects: with the rise in technology, businesses are moving towards digital transformation. Most of our clients come to us saying, “We want to go online but that’s too expensive.” One thing we advise them is to claim their R&D tax credit. 
  • Purchase of cloud solution: Now, you’ll be able to claim all the expenses that you’ve made buying a cloud-based tool that helped your business grow and contribute to the UK economy. 
  • Data processing & research: It will be more convenient and cost-saving for you now to take the help of analytics tools. You can without any issues invest in development projects. 

But, there’s a small issue too!

You can claim only UK-centric R&D tax credit

The Autumn Budget has made it clear enough that you can’t make a claim of R&D tax while working on such activities outside the UK. You will have to carry out any development projects in the country to be eligible. 

Later, a report by HMRC stated that R&D activities related expenses happening overseas in march 2018 went up to £7 billion. The government was worried about the money not being invested back in the UK. 

From April 2023, UK organisations might have the option to claim for R&D activities that happen in the UK. 

This gives birth to some issues. For example, many businesses leverage a global pool of talent to develop their projects. Also, they hire foreign companies to succeed in their operational processes. But now, they will not be able to claim R&D and it might raise their overall expenses and budget plan. 

Tim Croft, National Head of R&D at Azets said, “We welcome the widening of allowable expenditure in IT, which will considerably help the SME sector in which businesses use cloud-based solutions to enable their IT infrastructure. However, the announcements on refocusing of reliefs towards domestic expenditure should ringfence onshore development, further driving forward UK based innovation.

Start claiming your R&D tax credits!

We have been talking to our clients about all these changes, how they could impact their businesses. We have been helping them adapt to everything with ease. 

Zyla Accountants provide easy guidance to SMEs to claim R&D tax credits against expenses. It helps our client to get their free-up funds transferred to more useful departments in the business. The changes will likely affect your business as well. It is better if you start benefitting soon and grow your business.  

Book ina call with our CEO Suzy Kerton to see how we can help you out in your R&D activities. 

For more information, contact us at:

Also Read: 15 things you didn’t know an accountant could do

Zyla welcomes the £1 billion in support for leisure and hospitality businesses most impacted by Omicron across the UK

Zyla welcomes the £1 billion in support for leisure and hospitality businesses most impacted by Omicron across the UK

We’re delighted with the news that additional support will be available for businesses who have been impacted by the Omicron variant, the Chancellor, Rishi Sunak announced today (21 December). We’ll be on hand to support our clients every step of the way and obtain the right advice and support they need. 

  • Businesses in the hospitality and leisure sectors in England will be eligible for one-off grants of up to £6,000 per premises, plus more than £100 million discretionary funding will be made available for local authorities to support other businesses 
  • The government will also cover the cost of Statutory Sick Pay for Covid-related absences for small and medium-sized employers across the UK 
  • £30 million further funding will be made available through the Culture Recovery Fund, enabling more cultural organisations in England to apply for support during the winter 

Recognising that the rise of the Omicron variant means some businesses are likely to struggle over the coming weeks, the government is providing one-off grants of up to £6,000 per premises for businesses in the hospitality and leisure sectors in England. 

At what is often their most profitable time of year, many pubs and restaurants have seen cancellations and reduced footfall as people have responded to the rise in cases ahead of Christmas, with Hospitality UK reporting that many businesses have lost 40-60% of their December trade, often their most profitable month. 

Around 200,000 businesses will be eligible for business grants which will be administered by local authorities and will be available in the coming weeks. 

Given the uncertain situation faced by businesses, the government has chosen to provide generous grants, which are equivalent to the monthly cash grants provided to hospitality businesses when they were fully closed earlier this year, despite businesses now being still able to trade. 

The effectiveness of government policies to support the economy through the pandemic and the success of businesses in learning to adapt means the economy is in a different place now than it was at the start of the crisis. 

Many businesses have more cash in the bank than they did at the start of the pandemic and net cash deposits for all hospitality businesses have risen by £7 billion (40%), while small

and medium-sized businesses in the hospitality sector have seen their cash deposits rise by £2 billion (79%). 

Fewer businesses have become insolvent, with insolvencies running 25% lower than pre-pandemic in hospitality, and vacancies are 50% above pre-pandemic levels. 

To support other businesses impacted by Omicron – such as those who supply the hospitality and leisure sectors – the government is also giving a more than £100 million boost to the Additional Restrictions Grant (ARG) fund for local authorities in England. 

Local Authorities will have discretion to allocate this funding to businesses most in need. The ARG top up will be prioritised for those local authorities that have distributed the most of their existing allocation. This is on top of the £250 million of previously allocated funding that remains with local authorities. 

As increasing numbers of Covid-19 cases means more workers taking time off work, the government is also reintroducing the Statutory Sick Pay Rebate Scheme (SSPRS). 

The SSPRS will help small and medium-sized employers – those with fewer than 250 employees – by reimbursing them for the cost of Statutory Sick Pay for Covid-related absences, for up to 2 weeks per employee. Firms will be eligible for the scheme from today and they will be able to make claims retrospectively from mid-January. 

To provide continued support to the cultural sector, £30 million further funding will be made available through the Culture Recovery Fund to support organisations such as theatres, orchestras and museums through the winter to March 2022. 

This figure will build on nearly £240 million of cultural grant support already allocated this financial year or currently available for organisations to bid for. 

Over the course of the pandemic the UK Government has provided nearly £2 billion to support our vital cultural sector, with the original £1.57 billion round of the Culture Recovery Fund announced in July 2020. 

The UK Government is working closely with counterparts in the devolved administrations and businesses across all parts of the UK. 

As part of this support announced today, the devolved administrations will receive around £150 million of funding through the Barnett formula, comprising around £80 million for the Scottish Government, £50 million for the Welsh Government and £25 million for the Northern Ireland Executive.

This contributes towards the £860 million of further funding announced by the UK Government in the last week to support the devolved administrations, allowing them to provide additional support to businesses in Scotland, Wales and Northern Ireland as they see fit. 

These additional measures will reinforce the existing package of business support, including: 

  • business rates relief means that the majority of businesses in the hospitality and leisure sectors will see a 75% reduction in their business rates bill across the entire financial year and a new 50% capped business rates relief next financial year; 
  • a 12.5% reduced rate of VAT for hospitality and tourism to support the cash flow and viability of around 150,000 businesses and protect over 2.4 million jobs, until the end of March; 
  • the £1.5 billion Covid Additional Relief Fund for businesses that have not previously had business rates support; 
  • businesses will be protected from eviction if they are behind on rent on their premises, thanks to the moratorium in place until March 2022; 
  • access to finance for SMEs through the Recovery Loan Scheme to June; and
  • Bounce Back Loan repayment flexibility, with borrowers having the option to take a 6 month repayment holiday, three 6 month interest only periods or extend their loan to 10 years, which almost halves the monthly payment. 
  • support for the aviation and travel sectors, including over £12 billion since the beginning of the pandemic, and the Airport and Ground Operations Support Scheme (AGOSS) until the end of March 2022. 
  • HMRC stand ready to support any business impacted by the coronavirus pandemic through its Time to Pay arrangement, and the Chancellor has asked them to offer businesses in the hospitality and leisure sectors in particular the option of a short delay, and payment in instalments, on a case by case basis, as part of this. 

Further information: 

The funding consists of: 

  • £683 million for targeted grants for hospitality and leisure businesses in England
  • £102 million top-ups for the Additional Restrictions Grant 
  • £30 million for Culture Recovery Fund 
  • £154 million of Barnett funding covering all three above 
  • Funding for the Statutory Sick Pay Rebate scheme will be added to these amounts

If you are a hospitality business and seek support with the latest changes,

please contact us on 0203 468 2241

or Email us at [email protected]

How new or early-stage businesses will benefit from hiring an accountant?

How new or early-stage businesses will benefit from hiring an accountant?

According to business start-up statistics in the UK, 20% of businesses fail in their first year. Around 60% will go bust within their first three years. So what are the reasons for such a high failure rate? While there are many factors, the top two reasons start-ups fail is because:

  1. there’s no market need for their services or products, or;
  2. They ran out of cash.

These two reasons, like many of the others, could have potentially been avoided if they had consulted professionals early on in the process of setting up their business. Professionals such as accountants.

Here are 9 ways that new or early-stage businesses benefit by hiring an accountant earlier rather than later.

9 ways hiring an accountant can help new businesses

They can help you…

  1. Identify whether your new business idea is feasible – an accountant can help you analyse your market research data to see if there’s enough demand for your product or service to sustain your business. They can also assist with outlining your business goals too.
  2. Decide on a business structure – choosing your business structure can impact your tax, personal liabilities, and asset protection etc. An accountant can help you choose the right one, saving you time and money in the process.
  3. Create a business plan – a big chunk of your business plan will be your financial forecast which outlines your business costs, revenue projections and the funding you will need. Naturally, an accountant is the best professional to help you with this cost analysis. 
  4. Secure funding – accountants can advise you on which lenders to approach as well as helping you create your loan pitch. They can help you create an accurate and reliable economic forecast for your business.
  5. Register your business – you will need to register your business with the government and the Internal Revenue Services (IRS). An accountant can assist with this as well as registering you for tax, applying for licenses and permits you may need. They can also set up your business bank account.
  6. Choose the best business insurance – an accountant can advise you on the best insurance options to ensure you have complete protection at the most cost-effective price. They can help with property and vehicle insurance to professional liability and business interruption insurance. 
  7. Make the right recruitment decisions – from advising you on recruitment decisions (e.g. whether a part-time employee or outsourcing makes more financial sense) to helping you with payroll and auto-enrolment, accountants can help significantly when hiring employees.
  8. Set up cloud accounting software – accountants can help you run your business more efficiently by looking at your processes and advising on the most appropriate cloud accounting software. Some even offer migration, set up, and training services when it comes to software too.
  9. Plan for the future – great accountants become trusted members of your team. They help you set your business goals. They provide you with ongoing advice and support throughout the years to help you achieve them. 

Always seek an accountant’s advice when starting a new business

Failing to properly plan for the financial needs of a new business will undoubtedly lead to challenges. Challenges that could lead to the complete failure of the business if left unaddressed. 

By hiring an accountant involved as early as possible in the process, they can identify and mitigate any risks for you. They can help you budget and forecast your finances. 

Let Zyla Accountants Assist You!

With Zyla accountants by your side, you’re far more likely to be a part of the 40% of new businesses that survive the 3-year mark!

We can assist you with setting up your business in the market by managing its finances, books and compliance needs. Our accountants can apply for advanced assurance from HMRC. It conveys to potential investors that the investment in your business is qualified for SEIS or EIS which offers them great tax rebates.

Take a call today with our CEO Suzy Kerton to see how we can help you!

Call us on 0203 468 2241

Email us at [email protected]

 

How to kickstart your new year (4 productivity tips)

How to kickstart your new year (4 productivity tips)

Many people find it hard to return to work after the long Christmas and New Year slowdown, but 2020/21 has slowed many people down to a halt. It may take longer than normal for some people to return to their usual productivity levels – but why stop at “usual” when things are unusual? Why not aim higher? To help you do just that, here are 4 productivity tips to being as productive as possible when you return to work.

  • Know what you want to be different 

Think about what normally happens when you start back at work. What tasks do you do that don’t really need to be done? What high-value tasks can you do instead? How much time do you usually have before things properly kick in and you’re very busy?

If you think about what you want to change so that you can start the year right, your intentions will be clear going into your first day and you’ll be far more likely to achieve what you want.

  • Note the habits you’ll need to change

When you know your intentions (i.e. what you want to change), you then need to think about what action you will take. What steps do you need to take every day? Do you need to break bad habits that waste time and create new ones or do you just need to adapt them?

For example, if you want to develop a habit to do business development every day, try to link this to another habit that you already have. Something like every morning after I get a cup of coffee and switch on my computer, I will do 10 minutes of engagement on LinkedIn. 

  • Prioritise the right priorities

You shouldn’t have mounting emails or multiple requests from team members on your first day back, so use this time wisely. Prioritise the tasks that give you the most bang for your buck or the essentials that usually get pushed further and further down your to-do list. Plan your work for the next few months and start getting ahead. 

You can even use this time to build those all-important relationships with your network. Ring up your best clients to find out how they are; let them know that you are back and if they need anything from you, to give you a shout. 

  • Don’t forget to look after yourself

Yes, this is a productivity tip. The worst thing you can do is return to work and slot right back into the busyness and leave all those benefits that come with having a break behind. All that will do is result in you getting overwhelmed and potentially burning out after a few weeks or months. Instead, you should use this time to implement some self-care elements into your routine which you can carry on throughout the year.

Find out what works for you. Maybe it’s writing down a few things that you’re grateful for at the start of every workday. Maybe it’s going for a walk at lunch or the gym after work. Whatever helps you to focus when you’re working and switch off when you’re not, you need to make these a part of your daily work routine. What you’ll find is that you’ll keep that holiday feeling for as long as possible AND you’ll transition into a much healthier way of working where you’re far more productive. 

To sum up: 

Zyla Accountants can help you kickstart your new journey with the right accounting and bookkeeping guidance. Our accountants can assist a wide range of sectors and industries with specifically proven experience in IT, Hospitality, Construction, Fitness, Retail and eCommerce. 

We offer services such as Bookkeeping & VAT, Payment Runs, Payroll, Year End Accounts, CFO, SEIS & EIS Advanced Assurance and Compliance, and R&D Tax Claims for our clients. 

Get ona call today with our CEO Suzy Kerton to see how we can help you!

Call us on 0203 468 2241

Email us at [email protected]

Close Bitnami banner
Bitnami