Here at Direct Peak we have clearly seen the impact and some negative effects of COVID on the business community and the need for accurate financial forecasting for business. However, while there have been many challenges for the business community, there have been lots of opportunities too. The COVID-crisis is ever-evolving, and changes are happening all the time. It is essential that business owners have the ability and knowledge to be agile and react quickly to change.
The UK is officially in recession. We all need to identify opportunities for growth. We also need to be aware of the areas in the business where we can cut wasted spending.
As a business owner, if you are looking to apply for grants or funding, you need to know your numbers. Financial forecasting can help you identify the key areas of your business profitability. This is evidence for you and organisations offering grants or funding, that your business was in a good position before COVID, and you are ready to take advantage of emerging opportunities.
Many grant and loan providers will need to see proof of your business financials, where your business is at and where it is heading. By having a financial forecast in place, these providers can easily see how the grant or funding can help you expand and grow.
If you are business that is coming through COVID and are looking to access grants or funding for post-COVID business support, then this is a must-read blog post for you.
What COVID Financial Support Is Available?
There are various financial support options available to businesses during the coronavirus outbreak. For example, employers can apply for the coronavirus job retention scheme funding to support them with paying employees. There are other options which offer both tax relief and funding, all are outlined below:
Tax Relief for Business
The government is offering support with paying tax regarding deferring VAT payments and self-assessment payments. If you cannot pay your tax bill on time, this is well worth looking into.
If you are a business in the retail, hospitality or leisure industries you will be eligible for business rates relief. Some nurseries are also eligible for the business rates relief. If you are a nursery, it is worth checking with your accountant or looking on the government website to see the coronavirus financial support available.
Business Support Grants
There are some business support grants available throughout England. These include a small business grant fund, a grant fund for those in the retail, hospitality and leisure industries too. You may be able to apply for the local authority discretionary grants fund too.
If you are self-employed you can claim a grant through the SEISS, also known as the Self-Employment Income Support Scheme. The first round has already ended, but the second round has just opened on the 17th August.
There is financial support available for small and medium-sized businesses too. This includes a coronavirus business interruption loan scheme, the coronavirus future fund or the coronavirus bounce back loan. Again, with a financial forecast in place, it will be easier to apply for the available grants and funding.
As a large business there is the large business interruption loan scheme available to you. You may also be able to apply for the COVID-19 corporate financing facility.
What Is Financial Forecasting?
If you want to apply for funding, loans or grants a financial forecast will really help you. It allows you to see what your business finances look like going forward. This is the information that providers of grants, loans and funding will often need to see when deciding if you are eligible for their money.
However, financial forecasting helps in other ways too. It will identify your key areas of profitability. This enables you to see what areas of your business bring in the most money, and therefore which areas of the business you need to focus on.
Here at Direct Peak we create financial forecasts for 12 months. If you have a very clear long-term vision, we can forecast for longer periods. We don’t recommend longer financial forecasts though as things in business can change so quickly.
Our accountants will create a three-way financial forecast for you. This incorporates your profit and loss, your balance sheet and your cash-flow. By including cash-flow in the financial forecast you can see what funding you may need and how long you will need it for. This will often be an essential part in the process of applying for a grant or funding.
When we are working on a financial forecast for you, we will include a planning session. During the planning session we will sense check your growth plans. This helps us ensure that nothing is missed. For example, if sales revenue is growing what level will it need to be at to bring in a new member of staff. Further growth may need an office expansion, so we will include when this will need to be.
If you are looking to access grants and funding post-COVID or are considering grants to help with the growth of your business; contact our team now. We can help you fully understand the financial support out there for your business and help ensure you are accepted for the funding available.
Looking for business accountancy services
Use Xero To See Your Business Now
There are loads of desktop-based accounting packages, Sage being the best known, that are great at telling you how your business has been doing through a historic and backwards-looking view, but what if you want to know how your business is doing right now?
With desktop-based accounting packages you need to key in data manually and there is minimal automation available which means the business numbers you are looking at are likely to be days, weeks or even months out of date. This means you are basing important business decisions on past business numbers.
Sage is a popular and very good accounting package but with a new kid on the block users are quickly seeing that there are better accounting packages out there.
Making the switch to Xero
The biggest benefit of Xero is that you have access to real-time information and can see your current business numbers based on recent transactions.
As a Xero Accountant in Peterborough we have seen lots of benefits for our clients when using Xero for their business, such as having all the key numbers in one place including cash in, outstanding bills and invoices, cash out and profit and loss figures too.
On top of this you can also connect your bank account with Xero giving you a live view of your bank balance as it stands right now and it will also show all the incoming and outgoing transactions as they are processed to and from your bank allowing you to make informed financial and business decisions.
Financial Forecasting for Business
Many businesses struggle with keeping on top of their invoicing but with Xero this is covered too; you can process and email invoices straight to the customer. You can then easily monitor when payment is due, made or unpaid. As well as this you can download Xero Add-Ons that make your life even easier, such as Receipt Bank which will automatically take the details of the receipt and put them into your Xero data.
By far the biggest advantage of Xero accounting is that you have real-time reporting. If you need to make a large purchase you will know what your account looks like right now and you can also use real time reporting to see a cash report or a profit and loss statement with the peace of mind that the business numbers you see truly reflect the current financial position of your business.
If you are looking for a Xero accountant in Peterborough or would like to know more about Xero Accounting please do not hesitate to contact me directly; I will be only too happy to answer any queries you may have.
Why Your Start Up Needs An Accountant
Financial forecasting for business
While accountants are not always seen as a ‘must have’ for start up businesses, there is a lot of things that start-ups need an accountant for. In this blog post we have put together just some of the reasons that your start up needs an accountant.
You’ll Be Busy
As the owner of start up business you will be really, really busy. In the early days it is likely you will be the only person within the business which means you are the owner, the marketer, the admin, the sales, the secretary, the customer service rep and the toilet cleaner. You may think you’ll be busy, but you’ll be busier than that – trust us! As experienced accountants for start-ups, and as a business owner myself, we know how busy you will be. A start up needs an accountant to help them keep the finances and books up to date. If you let it slip it could have disastrous effects on the business.
Taxes Aren’t Simple
Calculating your estimated tax payments can be tricky. In fact the National Federation of Independent Business surveyed small business owners on their concerns. Every month when the survey was repeated and the report shared ‘taxes’ always ranked highly of the list of business owners concerns. Your start up needs an accountant to help you understand your tax payments and your tax code. You will find a good quality accountant to be a huge source of relief when it comes to taxes and dealing with HMRC.
Accountants Are Liked By Investors
As an entrepreneur you may be great at pitching your business. However, when you start talking to investors they will want to see and hear more than just your pitch. Investors want to see hard facts which includes your current figures, a financial forecast and growth projections. By working with an experienced accountant for your start up, even if you are not looking for investment now, you will be more attractive to investors.
Growth Is Made Easier
While you know you want to grow your business, it is not always that easy. When is a good time to expand? Which part of the business should you expand? How far can your finances be stretched without putting the business at risk? A good accountant will be able to help you plan for the future and plan for growth. It is always a good idea to run ideas past your accountant and they can then offer advice and guidance to help you.
Reports show that 3 in 5 businesses fail in the first year of business. Many studies show the reason behind this failure is poor financial planning. While start up accountants may look like an expensive luxury for a start up business, you’ll be amazed at how much help they can offer you and how much money they can save you over time.
Direct Peak provides a dedicated business tax accountant, who will prepare your annual accounts and tax returns. They will be on hand to answer any tax queries you have.
Your business tax accountant will ensure that the company is set up in the most tax-efficient way and that you are claiming for all the correct expenses to maximise your earnings.