How Businesses Can Recover From The COVID-19 Pandemic15 Sep 2020
In this blog we'll show you how businesses can recover from the COVID-19 pandemic. Let’s face it, so far, 2020 probably hasn’t gone quite as you planned. That’s very likely putting it mildly, and for many of us, it’s been a challenging start to the new decade. The key to recovery is to make the best of what’s available. While your original plans probably flew out the window a little while ago - you can use the time while your business is on hold to draw up a fresh set.
For those of you wondering exactly where to start doing just that, we’ve put together some tips. In this article, you’ll find some ideas on how to recover loss in business momentum. We’ve also put together some ideas that will help you get ahead of potential cash flow problems. Your business recovery may not happen overnight, but there is help available to make it achievable.
How Businesses Can Recover From The COVID-19 Pandemic
Know your cash flow forecasts
None of us has experienced anything quite like the current situation. Governments, organisations, and individuals are all navigating what is completely unchartered territory. While that may make doing business difficult, there are things you can do while waiting for a return to normality. Making a cash flow plan for when the furlough scheme ends is one of those things.
Ensure you have a realistic idea about the level of sales you can expect when your business emerges from hibernation. Sit down and work out precisely what your business outgoings are going to be during that critical period too. The ability to predict cash flow problems gives you the capability to get in front of them. Forecasting will see you better placed for business recovery. Identify any potential pinch points and put measures in place to minimise the impact. In these uncertain times, being aware of anything that lies ahead is an advantage – even if that thing is a hitch. Planning which enables you to keep the lifeblood of your business flowing is not only something you can do now – it’s also something that will set you up for success later.
What funding is available to manage cash flow?
Once you’ve mapped out what lies ahead, consider all the ways you might address any potential cash flow shortfalls. On top of your established available lines of credit – such as overdrafts, credit cards and bank loans – there’s a range of government measures you can also consider. From bounce back loans to rate relief; make yourself familiar with what’s available for your specific circumstances. Develop a working knowledge of what you’ll need to apply for any scheme or loan that applies to you – and do that ahead of when you may need it.
Expect customers to pay you more slowly than before
With so many businesses on pause, you can expect any restart to be a little sluggish. At the moment, the papers can make for depressing reading. Estimates of how long the economic recovery might take start at three years and go upwards. Predictions aside, it’s going to be helpful to keep in mind that things won’t instantly ramp back up. It’s fair to regard that as just one more hurdle to overcome. However, it’s also true to say that most of us are going to be in the same boat. Your business won’t be alone in trying to reestablish healthy cash flow. It’s highly likely your customers will be grappling with that too. When you’re forecasting, don’t base projections on customer payment times before the pandemic. Allow some contingency and err on the side of caution. That will result in fewer unwanted surprises.
Remember, issues which arise because clients are slow to pay aren’t insurmountable. If delayed payments start to cause real cash flow problems, invoice financing is one option to consider. That’s a form of credit which won’t be familiar to all of us. Invoice financing is a relatively straightforward and cheap way to deal with slow payers. It’s a form of debtor finance where you borrow on the value of an outstanding invoice for a small fee.
You still need to pay VAT and other taxes
There’s the chaotic nature of a global pandemic—the unpredictability surrounding how your business is going to bounce back. Then there’s the absolute certainty of taxes. The taxman may well be self-isolating, but that just means he’s going nowhere – and tax payments remain something essential in any business recovery plan you put together.
The 31st March deadline for VAT in 2021 might well be the very last thing you want to think about right now – and you can be forgiven for that. However, planning for your tax liabilities is only going to stand you in good stead – and provisions exist to help COVID-19-affected businesses. HMRC has also scaled up its Time to Pay service, and the corporation tax rate has been frozen at 19% for the next financial year.
Accounts & Legal – helping business owners on the road to recovery
The road ahead may prove to be a bumpy ride. Many business owners and employees will have days when everything feels like it’s an uphill battle. However, your journey back to business recovery is possible. The right planning is a great place to start preparing for the day you start moving again. A little bit of help along the way can also get you travelling faster and more efficiently. Expert advice will make sure you’re doing that in the best direction possible.
Accounts & Legal provides specialist financial forecasting and modelling services to a broad range of businesses. Our philosophy is based on open and honest communication and a monthly fixed fee structure. While forecasting during the COVID-19 pandemic is essential, it’s highly beneficial all the time.
Our expert teams can help you to set up the right reporting systems and software for your business – and teach you how to make the best use of them. Accurate financial forecasting not only saves costs and identifies future risks – but it also makes your business a better prospect for lenders and investors.