The new financial year of 2022/23 began on 6th April and will run until April 5th next year, bringing with it several changes for individuals, families and businesses across the UK. This includes the fact that the tax break in England has been steadily unwound. Over the past 9 months businesses were receiving a 66 per cent reduction of their rates up to £2m per firm. This was scaled back to a 50 per cent reduction with a cap of £110,000 per business on April 1.
Alongside the rise in interest rates from 0.5 to 0.75 per cent due to inflation, clever accounting has never been more important for businesses. Here our very own management accountant, Ryan Pape, shares his top 4 accounting tips that any business can keep in mind, no matter their sector or size.
1. Use brokers
At Bluestone we use brokers for our telecoms, insurance, and energy. They make the process easier by doing more of the leg work and can save you money. Make sure to do your research on who you are working with. Price is important – but good service is essential.
2. Review your contracts
Check if you are still in contract with your suppliers. If not, contact them right away and/or identify when they come to an end and start negotiations early if appropriate. It can be something as simple as your photocopier. We noticed we weren’t printing anywhere near as much due to clients printing documentation at home, the movement towards accepting e-sign and scanned copies as original documentation and more of our marketing material is becoming digital. The contract was initially set up with a minimum print amount at a specific rate to save cost, but we weren’t printing that much anymore so it was costing us over what it should have.
We renegotiated the contract, got a new copier, the cost of which was offset by the savings we made within 10months, and we will now benefit from a saving over the remaining 14 months of the agreement.
3. Move to digital
Businesses across the world have moved as much as they can to digital systems due to the pandemic. Don’t be afraid to move those last physical files and systems you still use; we have been able to complete our audit fully remote this year. Granting the auditors guest access allows them to use the same folder structure we use. Gone are the days of putting the auditors in a small meeting room with the air-con cranked up. If they can do more remotely and spend less time on the audit, you may see a fee saving or a smaller increase than there would have been otherwise. We also use a digital expenses software which makes the submission and processing of expenses so much easier than handling a printout of an excel spreadsheet with several receipts stapled to it.
4. Cash is king
Review your debtor controls. Are you chasing regularly enough? Are debtors taking longer than they should to pay and, if so, why? How are you chasing? I encourage my team to speak to debtors instead of email where possible as in my experience the debtor is more likely to pay. They will be more forthcoming over the phone if they are having financial difficulty and you can work together to come to a solution that works for both parties.
Where appropriate use finance for capital expenditure instead of tying your cash up, as you can then use that cash to grow your headcount or to fund items that you are unable to finance, although you’ll be surprised how many assets can be financed!
What you could do with your cash if you leased more of your business’ assets? Would you…
- Invest in research and development?
- Launch a new product?
- Boost your marketing strategy?
- Buy more stock?
- Hire or promote essential staff?
- Protect your business against unforeseen circumstances (like a pandemic-induced lockdown) with an emergency fund?
Leasing can be a powerful funding tool for businesses of any size. You could get the assets your business needs to succeed now, spread the cost via regular affordable payments, keep hold of your cash to further growth (or maintain liquidity), and potentially unlock big tax savings.
If you would like to speak to one of our friendly team about how finance could help your business to grow, get in touch at email@example.com.
We are pleased to announce that we are supporting a new charity which is local to the Bluestone head office: the Normanton Foodbank (part of The Well Project). What does the Normanton Foodbank do? “Here at the foodbank we don’t think anyone in our community should have to face going hungry. That’s why we provide … Continue reading Bluestone Backs New Charity: Normanton Foodbank
Headlines The Annual Investment Allowance of £1,000,000, which had been due to revert to £200,000 at the start of 2022, has been extended until the end of March 2023. The Super deduction tax relief, which had been due to end in December 2022, will remain in place until March 2023. Annual Investment Allowance (AIA) What … Continue reading Tax Relief Update: Deadlines Extended for AIA & Super Deduction
The Bank of England has raised interest rates for the fourth time since December 2021 to 1% – the highest level in 13 years – but what does this mean for UK businesses? And is there anything they can do to minimise the financial impact on their operation? Who makes the decision to increase interest … Continue reading Bank of England Announces Rise in Interest Rate: How Could it Impact Your Business?