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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.
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.
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.
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.
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…
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.
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