Businesses get smart advice on looking after the pounds and pence

Recessionary times mean all businesses have to work harder just to keep their heads above water.

This month, the Uckfield News Business Scene has been getting some financial advice from the experts.

It will not make the recession go away but this advice could give you a bit more breathing space than you had before.

'It's not all about the tax man'

Work on your business as well as in your business. That’s the advice from Chris Bendall of Balanced Accounting LLP.

He said: “It is not all about the tax man, although tax and VAT are important. It is about your business as well.”

Good financial records are important for a number of reasons and doing “the books” quarterly or annually for VAT or tax returns is not necessarily enough.

Up-to-date records will tell you:

How the business is doing;
Enable you to make comparisons;
Identify trends and areas that need attention;
Highlight where costs could be trimmed; and
Show where income can be optimised and opportunities taken.

Mr Bendall said cash flow was vitally important with a need to have money to pay the wages and the VAT and tax bills when they become due.

He offered the following advice:

Invoice all sales promptly and collect the money. Don’t wait until the end of the month to send out invoices if the project is completed;
Monitor your debtors and clamp-down on late-payers. Mr Bendall said good financial control was a way of ensuring you focus on your business and work on areas that need to be concentrated on. “Take time to work on the business as well as in the business. Look at the figures and get others, such as an accountant, to look too.
This will often lead to new ideas and changes that can improve profitability.”

Business Records Checks start today

Lyn Lulham from Just Simply Organised warned small businesses need to be aware of the HM Revenue and Customs starting 'Business Records Check’ from July 1.

She said: “HMRC are aiming to do up to 50,000 of these checks in a year and if they are not satisfied with the way the records are kept it could lead to a full investigation of VAT, Tax or PAYE.

“It would be wise for all businesses to take out 'Fee Protection Cover' either through their accountants or insurance brokers but, first and foremost, make sure your records are all up to date so that, if you do have a visit, HMRC will be satisfied and not take it any further.”

How to avoid financial disaster

Peter Hewitt, Practice Director of Swindells, offered ten tips to “avoid financial disaster”.

He said: “Even in difficult times new businesses start up but too many young businesses fail due to lack of proper financial control.

The following ten practical guidelines may help.”

1. KEEP PROPER ACCOUNTS: A new business can start with simple book-keeping, what’s important is that records are kept up to date.

2. CREDIT CONTROL: Established businesses will understand if you ask for payment on delivery in the early days. Before allowing credit, do a credit check.

3. MANAGE CASH FLOW: Cash flow is critical. Keep tight control over expenditure; minimise stocks, collect debts fast and use suppliers' credit.

4. BUDGETING: Budgets steers the business towards its objectives they must cover all aspects of the business and should be monitored regularly.

5. COSTING IS CRITICAL: Proper costing provides information that helps planning and decisions.

6. PROFIT MARGINS: Ensure you are buying at the lowest possible prices. Cutting the marketing budget when profits are not met can be a mistake.

7. UNDERSTAND YOUR ACCOUNTS: The profit and loss account shows what profits are being made. The balance sheet is a financial picture of your business. Understand both.

8. STAY FRIENDLY WITH YOUR BANK: Keep your bank manager in the picture. It is worth keeping in touch with other banks.

9. KEEP TIGHT CONTROL OF STOCKS: Stock is capital locked up and should be kept to a minimum.

10. PAY CREDITORS ON TIME: Pay creditors on time. When this is difficult, explain the position and agree a payments schedule.

In other news

Tell MP if you are tied up in red tape

Wealden MP Charles Hendry is asking local businesses to give him examples of unnecessary red tape. He said the Government has begun a public audit of all 21,000 regulations, with the commitment to remove burdensome ones. “For small businesses that have been struggling over the past few years, it is absolutely vital that we cut red tape.

There proposals will be of great benefit to local business across Wealden, and I believe that these announcements be important for the continued success and prosperity of many small businesses.

“We need to be particularly careful with regulations from Brussels, that we don’t ‘gold-plate’ them and make them much more draconian in the UK, than in other EU countries.

“I would be very interested to hear from local business people in Wealden, about specific regulations they think are overly bureaucratic and unnecessary.”

Adult social care views sought

Businesses in East Sussex are being asked to help shape the future of adult social care in the county.

The county council would like to get views from local businesses and organisations on how they could deliver services to help people with daily living and independence.

Cllr Bill Bentley, Lead Member for Adult Social Care, said: “We have changed the way we fund and arrange services in social care and people now have their own personal budgets. This means that people have more choice and control over what to spend their budget on, within the available resources, to make things work for them.

“It’s an exciting development and we want to ensure that services can respond by offering more choice and tailoring services to meet people’s individual needs.”

The council wants to hear from any business or organisation, large or small, that provides social care and support services in East Sussex.

The views of organisations or people who are thinking about offering a service in the area are also very welcome. The council is particularly interested in the challenges and opportunities for local businesses and organisations, and people’s ideas about what the Council can do to support their business to move forward in the future.

The survey lasts until August 8 and is found by following the link .