I was told when I was younger that there are only two certainties in life – death and taxes. Both have the ability to close your business. I have since found out that there are more certainties than those two but I wouldn’t want to start an argument this early on.
I cant do much about the timing of the grim reaper, but the tax man cometh. In fact with surprising frequency if you run your own business. Monthly or sooner if you have staff and PAYE, GST can come as fast as every other month, and if you make a profit then there’s terminal and provisional tax across the year. Oh, lets not forgot your own personal tax to pay too.
As a business are you managing to pay your tax on time? Coping with any business growth, making money and having staff can all eat into that cash flow that was meant for the tax man, lets not even get into paying the suppliers on time just to keep the business running. Oh and having just had to pay out for the holidays, where has the money gone?
Often your Banker will be unable to help if you haven’t paid your taxes or have slipped into arrears – oh and we can all appreciate with interest and penalties how expensive that’s going to get for the business. Sometimes the problems are all too familiar:
In managing your debtor collections the money doesn’t always flow as quickly as you’d want it to,
Your suppliers need paying so that your business can continue to trade and that the lights stay on.
The staff MUST be paid, just to ensure the day to day flow of work continues and to keep the wheels turning.
So sometimes the tax man and his bills get forgotten and until the reminders come through; some not all that pleasant. We understand that often when this happens your Bank isn’t able to help you, so where can you get the cash flow from?
Have you considered the other options?
Have you considered unlocking the value in your aged receivables, your unpaid debtors, people that genuinely trade with you and will pay in the next 60 days or so? If you look at how much you are owed and could release 80% of that into your bank account now, what would that enable your business to do?
Imagine having the confidence to say yes to every order.
Imagine being able to increase your resource, staff, supply, as you needed to.
Imagine knowing you can grow and make sales because the cash flow will be there alongside your needs.
TOP TAX TIPS
- Have a separate account for the tax liability that locks away the cash
- Know all the tax dates and set your own reminders for payment
- Tell the taxman early if you can foresee a payment problem
- Talk to your accountant about tax efficient strategies
Here at Lock Finance, we help you speed up that timing of cash through your business. We help you access the money locked in your sales invoices before your debtors pay. This enables you to keep on top of and sometimes ahead of, your bills as you grow. It can also enable you to access fast payment discounts that may have been eluding you before.
If you would like to know more about how easily cash flow can be managed for your business then call us, let’s have a coffee and a chat soon.
Sarah Lochead-MacMillan 027 700 2065