Well, it arrived. Hopefully, the beginning of a new dawn for all of us. 2021 brings the promise of the end of furlough, a COVID-19 vaccine and the possibility we’ll be allowed to leave our home office incarceration.
Well, that’s the hope anyway!
We need to take the time to truly thank all those who are taking us ever closer to the point of normality. However, we also need to be realistic and state that this situation will continue for many months to come.
Vaccines will most likely be rolled out to the bulk of the population by the end of the summer. If this permits the loosening of restrictions, then perhaps business can get back to some form of normality.
Until then business must truly continue to reinvent themselves, innovate and develop new routes to market. They must also get their back office in order.
The looking back includes:
- Ensuring that all your accounting systems, epos systems and reporting is in place and allows you live up to date data on the financial position of your business.
- Continue to monitor cash on a day-to-day basis.
- Ensure all contracts – both staff and suppliers are in order.
Each business will have their own cross to bear on what they need to truly strengthen.
Why bother with all this?
Simple – the more robust you make your business at the rear, the greater opportunity you have of surviving the next few months and having the cash to rebuild and grow.
This has gone on considerably longer than anyone would ever have thought.
Cash is at the limit for many businesses. However, the main aspect must be to continue to monitor this.
Yes, loans are still available. Do remember they need to be paid back at a later date though. They are not free, even if you have ten years and 2.5% per annum.
The concern for the New Year is that many businesses now have to face the reality of what has enabled them to get through the past nine months.
- Loan funding
- VAT deferral
- Self-Assessment payment referral
- More lenient consideration from creditors.
Sadly, all the above are coming home to roost.
- Loan funding – this year you will start to be paying this back.
- VAT deferral is due to be repaid on or before the end of the tax year.
- Your self-assessment is due in a few days’ time.
- Creditors need to get their cash flow built back up and late payments will no longer be tolerated.
So, take a step back and look carefully at your position.
If it is not looking as good as expected, then take advice early, do not bury your head in the sand.
None of the above is going away. HMRC have very long memories and the banks will eventually want their repayments.
At CJM, we have been providing financial forecasts, financial management reviews and financial strategy considerations for the past 13 years. Speak to a firm who care and can provide a structured response before the risk becomes an issue.
While we wish you the best for 2021, this is unfortunately not a very Happy New Year.