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Cash-flow Issues

Posted: 11 Jul 2011 in Blog Business Startup Business Advice

 

With the current business environment being turbulent, cash shortages within a business can throw up a range of problems, ranging from minor cash-flow issues to insolvency. Your accountant should be able to help you deal efficiently with any of these issues, allowing you to manage the flow of cash within the business.

There are a number of mistakes people make in regards to their businesses and cash-flow problems. Some panic but others make the worst mistake of sticking their heads in the sand and ignore the problem in the hope it’ll go away. In the case of financial matters it very rarely does. A good accountant should know your business and be able to help you to work out a solution. Whether this means organising a payment schedule with your creditors sorting out credit control issues your accountant is often the best placed to help your business.

In terms of insolvency, it is often assumed that an insolvency practitioner is the best person to talk to. However I would advise talking to your accountant first in order to work out what are your options and whether you are in fact insolvent!

Your accountant can also look over your business model and perhaps implement a restructuring plan, change costs and advise when to take legal advice. Your accountant can also negotiate with suppliers, banks and if needs be, the HMRC on your behalf.

An example of this is occurred with one of our clients who had broken their banking covenants but wanted to increase borrowing by one million pounds, in 2009 against the backdrop of the recession and banking crisis. We spoke to the bank on their behalf and after five months of negotiation we managed to secure eight-hundred thousand pounds of additional borrowing. We think this is yet another example of how your accountant should be an asset to your business.

Please check out the rest our articles for further information. 

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Tax Rates

Income tax2013-142014-15
Tax-free personal allowance (under 65)£9,440£10,000
Basic rate: 20%£0 - £32,010£0 - £31,865

Higher rate: 40%(dividends: 32.5%)

£32,011 - £150,000

£31,866  - £150,000

Additional rate: (dividends: 42.5%)

Over £150,000

(45%)

Over £150,000

(45%)

Capital Gains2013-142014-15
Annual Exempt Amounts for individuals£10,900£11,000
Corporation tax (rates for financial years starting on 1st April)20142015
First £300,00020%20%

Next £1,200,000

23.75%21.25%
Over £1,500,00023%21%

Tax credit on dividends (basic rate taxpayer)

10%10%
Approved HMRC mileage ratesFirst 10,000 business miles in the tax yearEach business mile over 10,000 in the tax year
Cars & vans45p25p

Motor cycles

24p24p
Bicycles20p20p

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