Spring is the season of new beginnings and never has that been more true for business than this year.
As we emerge from lockdown, businesses are having to embrace new ways of working and many are counting the cost of a bleak 12-months where income fell drastically.
Spring 2021 has brought with it a host of changes that may affect finances for everyone. The minimum wage has increased, as has the personal tax allowance, Universal Credit and statutory sick pay. State pensions have also gone up along with Child Benefit payments.
But costs have risen too; prescription charges are up as are annual TV licence fees council tax and energy bills.
All of these changes will have their own impact on business finances, but on top of that, firms also have rules and regulations surrounding the post-lockdown ‘new normal’ to contend with too.
For a small business owner, getting the firm’s accounts in order should be a top priority right now. This will ensure they can face the coming year with clarity and certainty and make them ready to adapt to any further, unforeseen changes.
Here are our five tips for how you can make a start on spring cleaning your finances.
Go through your budgets and list what you are paying out each month. This gives you a clear picture of exactly what you are spending. Go through each item on the list and ask yourself – is this something I need? It maybe that you can cross some of these outgoings off your list altogether. Also ask if it is potentially tax-deductible. This could be an important way to save cash. Make sure there is also a contingency fund set aside to deal with unforeseen or one-off expenses.
Interest rates are low at the moment and it may be the perfect time to investigate further and find ways to save money on mortgage or credit card payments. Shop around and see if you can get a better deal.
It is vitally important for any businesses to have all the right insurances in place. It is important that this cover is reviews on a regular basis. You may find your policies are outdated or no longer provide adequate cover. You may also find you are paying over the odds after simply renewing a policy instead of shopping around for a new one. Take the time to compare premiums and make sure everything is in place at the right price.
Never avoid or ignore paperwork and bills. Open it, deal with it there and then or file it. Ignoring paperwork can lead to further costs and even fines if payment deadlines are missed and this can add to your stress, making you feel disorganised and out of control. If you feel paperwork is overwhelming and taking up too much time every day, schedule a set day or time each week purely to deal with it. This will give you greater focus and put your mind at rest so you can forget about it at other times.
This can lead to stress, confusion and financial problems. Business and personal accounts should be kept separate. Only pay business expenses from your business account and make sure you have a dedicated business credit card. This will make it easier to track your business expenses and budget more effectively.
Dealing with finances can seem like a mountain to climb. If you’re struggling with putting everything in order, it might be a wise investment to get outside help from experts. They can help you navigate your way through all the financial advice and options available and find the best way for you to save money.
At Parallax, we are an experienced and friendly team who can help bring clarity to business owners who may be struggling to manage finances.
If you need guidance or advice, our experts are here to help.
If you have any questions about our services then please do not hesitate to get in touch with our friendly team! You can call Lesley Kay on 0161 341 0368.