1. Fix it now
Interest rates will rise during the next few years, so if you think you may need to borrow for any reason, negotiate a fixed rate now and reap the rewards later.
2. Go through invoices with a fine-toothed comb
It's not like rummaging down the back of the sofa in search of a few forgotten coins - going through your invoices could uncover some serious cash. Chances are that your finance department will have double paid at least one invoice during recent months, and you'll probably discover payments that are too high or should have been axed ages ago.
3.Tax claims
Make sure you've claimed every possible tax allowance, including capital expenditure, home working, personal allowances and entrepreneurs' relief.
4. Excess VAT, who needs it?
VAT is one of the biggest regular expenses for most businesses, so find out how VAT efficient you are. For example, companies who have an estimated VAT-taxable turnover of less than £1.35m could consider signing up to HMRC's Annual Accounting Scheme for VAT. Instead of completing four VAT returns a year, this scheme allows you to make nine interim payments at monthly intervals, or three quarterly interim payments, throughout the year. You only need to complete one return at the end of the year when you either make a balancing payment or receive a balancing refund. Annual accounting can seriously reduce your paperwork and make it easier to manage your cash flow at the same time.
Try offering a discount to customers who pay on time or agree to pay by standing order
5. Don't pay VAT on bad debt
For companies who have an estimated VAT-taxable turnover of less than £1.35m, the HMRC's Cash Accounting Scheme for VAT offers other benefits too. Whereas normally you have to pay VAT on sales even when your customer hasn't paid you, with this scheme you don't. So even if your customer never pays, you will never have to pay VAT on this bad debt.
6. Employee incentive schemes are a real bonus
Instead of taxable bonuses, consider rewarding staff with share options under the Enterprise Management Incentives Scheme (EMI). These can be worth up to £120,000 per employee and offer a valuable incentive with no impact on cash flow.
7. Be ruthless - with the little things
Auditing your business is like having a spring clean at home. You'll find loads of things you'd forgotten were there and really don't need, which cut straight into your profits. Be ruthless - go through the little things, and if something's not making any money, saving money or adding any real value to your business, then get rid!
8. Discount loyalty
Try offering a discount to customers who pay on time or agree to pay by standing order. Better still, to cover the cost of the discount, factor it into your prices with new customers. You'll save time, money and the stress of chasing late payments, plus your customers will feel like they are getting a good deal.
9. Renegotiate with your suppliers
If you haven't reviewed terms with your suppliers in a while, then take a look at what they're providing you and how your needs have changed. Then approach them with a deal you feel is more suitable. It's usually a lot less expensive to keep existing customers than gain new ones, and your suppliers know this.
10. Send an e-invoice
Paper invoicing can be the stuff of accounting nightmares - inefficient, time-consuming and error-prone. So why not take it online? Like any system designed to help your office go paperless, online e-invoicing can reduce your overheads fast. Plus, e-invoicing has the added bonus of increasing the speed with which you get paid, and is great for your cash flow.
For more information please visit www.cbhc.uk.com
