How to avoid cashflow problems


Here are two startling statistics of start-up businesses:

  • One in four businesses don’t make it through the first year
  • More than half don’t survive past the fifth year of trading

There can many reasons for this, but one of the main reasons for this is down to cashflow – without it, a business simply cannot stay afloat. Below are some of the most common cashflow problems and some advice on preventing them from occurring in the first place.

Keeping accurate company records

Lots of new business owners put off bookkeeping duties as they are so busy with the huge workload that can be involved with setting up a new company.

The longer the books are neglected, the worse the problems will get; records and forecasts are pivotal to you knowing what is happening in your business.

It’s also important to ensure that you keep a proper record of what customers have and haven’t paid you to avoid significant sums of money that may owed to you getting overlooked. An effective accounting system is vital to manage your cashflow.

If you don’t have the time to do this yourself, an accountancy practice or bookkeeper will be able to do this for you.

How to manage company debts

Slow payers or bad debt is money that is owed but not paid.

This can be crippling for any new company but is usually preventable if a proper credit control system is put into place early on. If you discover that a customer has a poor credit record but you still want to take them on as a client, ask them for an upfront deposit or issue partial invoices so they can pay as portions of the work are completed. In other words, understand your customers and manage the risk.

A customer at any cost?

Calculate very carefully if want to offer credit terms – does your business model support it? If it doesn’t work early on don’t do it; you can always introduce credit terms as and when the business can afford it.

If you are currently in this situation then re-negotiate terms with your customers and/or suppliers or consider factoring the debt.

No cashflow forecast

A cashflow forecast is vital for any new business and is something that a qualified accountant can put together for you. This will allow you to forecast the months you can expect to see a cash deficit and the months when you may experience a surplus.

It will allow you to plan ahead as well, as give you a pretty good idea of how much cash your business is going to need over the next 12 months in order to survive. It is a good idea to keep the forecast on a rolling 12 month basis.

Free of charge accounting advice from Chartered Accountants

Omni Chartered Accountants offer totally free of charge advice for any business – new or otherwise – that may be experiencing difficulties. We are also here if you or would like to find out more about our cost-effective solutions that are designed to help your company run smoothly.

How to avoid cashflow problems

Call us now on 01902 837 408 or request a free of charge call back from our website today!

Don’t delay – file your self-assessment tax return today!

Don’t delay - file your self-assessment tax return today!

The self-assessment tax return is an unavoidable burden if you are liable for self-employed tax or have more complicated income tax affairs.

Both self-employed business owners and company directors must complete self-assessment tax returns.

The right approach to your self-assessment tax return will minimise the aggravation and can reduce the income tax you end up paying.

Our guidance will help you understand the key issues you need to deal with. For help with the specifics, talk to Omni Chartered Accountants; our expertise should save you both time and money.

Registering for self-assessment

There are a number of circumstances under which you may be required to complete a self-assessment tax return. For example, if you:

  • Are recently self-employed or have become a partner in a partnership;
  • Are a company director
  • Have untaxed income — perhaps from rental property — or complicated income tax affairs
  • Have an income of £100,000 or more
  • Need to pay capital gains tax
  • Have expenses to claim

You can find out if you need to complete a self-assessment tax return on the HM Revenue & Customs (HMRC) website, or by giving us a quick call on 01902 837 408.

Don’t delay – file your self-assessment tax return today!

Before you can complete your first self-assessment income tax return, you will need to register with an accountant or with HMRC. You should register as soon as your circumstances change but certainly no later than the 5th October after the end of the tax year for which you need to submit a form.

Why accepting help is a sign of wisdom, not weakness

Why accepting help is a sign of wisdom, not weaknessIt is more common than you think for people to consider that accepting help is a sign of weakness.

Actually, it’s a sign of wisdom!

While it may sound simple enough, accepting help is something that can be extremely challenging for all of us at one time or another.

It can be especially hard for those of us that believe that seeking help undermines our independence and our ability to cope. However the truth is that by refusing to accept help, we ignore the fact that we are social beings who need to co-operate with one another in order to ensure that we thrive.

Seeing seeking help from others as a weakness is often a very ingrained pattern of thinking and may therefore be hard to overcome.

Be honest and challenge yourself!

Why accepting help is a sign of wisdom, not weakness:

  • Is this affecting you or your business?
  • Consider exactly why you think that asking for help is a sign of weakness.
  • Work through how not wanting to ever seek help is reinforced by unrealistic ideals and wishful thinking.
  • Look to reality instead of relying on wishful thinking.

Whatever your challenges or issues, why not seek support? It may just be what you need to do right now.

Omni Chartered Accountants specialise in offering free, impartial advice to prospective clients and existing ones – If you have a problem and feel we could help, why not request a free of charge call back from our website or enquire online today!