This is a crucial time for businesses facing a coronavirus-induced cash crunch. You’re right to be considering immediate steps to improve your cash flow, particularly over the next twelve weeks. And you’ll also be looking closely at your working capital needs for the next twelve months.
You can make savings now immediately. If you’re registered with Swoop we can instantly match you with savings solutions across your everyday spend.
Here are our ten steps to help you save, improve cash flow and boost your working capital:
If you don’t already use online accounting software, now’s the time! There are different brands of software but they all allow you to store your accounting information in the cloud so you can stay on top of your cash flow wherever you are. Most importantly you can view cash flow forecasts with a few mouse clicks. Swoop can then integrate with your accounting software to simplify and speed up any application for funding.
Right now, there are a number of savings Swoop can help you make across your cost base, e.g. in banking, foreign exchange, utilities, insurance and broadband costs. By securely integrating your bank account Swoop can quickly analyse your everyday spend and identify where you can make savings immediately. Over the last 12 months we helped 2,582 businesses make total savings of over £2m in bank switching, £611,956 in foreign exchange and £381,911 in utilities.
Can you cash in on equipment that you no longer use, or inventory that might soon become obsolete?
If you need computers or other business equipment, consider leasing them to avoid tying up cash. You can still expense the lease costs when you calculate your business taxes. And if you have an existing lease, you might be able to get better terms.
Given that many employees are working from home, don’t post invoices – email them. Make a quick phone call before you email so you know the best email address. Ask for more than one email address (or a general one) so that you can copy in at least one other person or department in case the person you called isn’t available.
It might seem obvious, but make a point of sending invoices as soon as the work’s completed or products are delivered. If you are on the go or in a hurry you can create instant PDF invoices via a free invoice creator and send them straightaway by email.
Consider invoice finance as a way of borrowing money using your unpaid invoices.
Think about other ways to cushion your cash flow and boost your working capital. You might already have one or more of these in place, but consider the following:
If you have cash sitting in your bank account earning little or no interest, especially in light of recent interest rate cuts, now’s a good time to look for a better home for it. Of course it’s still important to keep adequate funds for your cash flow needs, and enough headroom to cope with unforeseen circumstances. This might mean that managing your cash becomes a more critical activity in the future.
If you think you’re going to struggle to meet your tax liabilities, a Time To Pay arrangement with HMRC would allow you to spread your business tax payments over a longer period of time. If coronavirus is the reason you cannot pay your tax on time, HMRC has a designated helpline: 0800 015 9559. It’s open Monday to Friday 8am to 8pm, and Saturday 8am to 4pm.
If you have outstanding claims for R&D tax credits and/or claims that are likely to be delayed by the increased pressure on HMRC, we can find funding for these in the form of a tax credit loan. This is a relatively new type of loan that uses your future R&D tax credit payments (from HMRC) as security.
The main benefit of an R&D tax credit loan is that you can access funds within a week. This is helpful because you could be waiting many months before you receive your tax credit from HMRC. Swoop can match you with the most appropriate provider for you.
We’ve split our COVID-19 guidance into three main sections – see below.
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