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Five Top Questions to Help SMEs Make the Most of your Accountant

In the wake of the EU Referendum many businesses here in the UK are looking forward to new opportunities in the future.  Companies still have business plans that may have been affected by the Brexit vote and many business owners will be wondering what this will mean for the future of their business.  The best person to give you advice on this will be your accountant and we’ve put together a list of five top questions that any business owner should be posing to their accountants as they face the future and all the changes it may bring.

  1. What is this government dong to help exporters?

UKTI (UK Trade & Investment) is the government agency that supports exporters (whether trade or retail) and co-ordinates a range of activities for business, including:

  • Sector based trade missions and seminars
  • Increasing exports via online channels
  • Export health checks to assess a company’s trade development requirements
  • Support to participate in overseas trade fairs and events
  • Advice on how to carry out the relevant market research and grants towards approved market research projects

  2. What can I do to improve my business?

From time to time, business owners should think about their long term objectives to ensure that the business is making the right type of progress.  Do you want to keep a lifestyle business in the family or would you want to sell the business I the future?  Are you intending to list your business on the stock market or merge your business with another?

As a business owner you should periodically review your personal wealth and discuss with your accountant if you are doing everything necessary to maximise your wealth.

  3. Should I register my business for VAT?

Registering for VAT usually results in a business needing more working capital as total debtors may increase.  Quarterly VAT payments means that you’ll stay more aware of your business cash flow.

If your business has reached the current annual VAT threshold turnover (£83,000) you will need to register for VAT.  This means that you’ll be adding VAT at 20% if the sale is at the standard rate of VAT which could prove challenging for businesses with customers who have no way of offsetting VAT charges.

  4. How Can my Business Generate More Cash?

Running a business profitably depends heavily on maintaining accurate records.  Any business owner should prepare a cash flow forecast which accounts for all known commitments, (payroll, prediction of receipts, payments for future sales, purchases and expenses).  This can be used to identify periods when the business might run low on cash and an action plan can be devised to remedy a situation before it happens.  

As a business owner you will also need to have a system for chasing money owed by customers.  Keep the aged debtors schedule up to date for recent receipts and in cases of late payment, escalate communications up the customer’s management chain where possible.

Pay attention to your credit rating and when you agree payment terms with suppliers make sure you stick to them.  Making late payments to suppliers can have a negative effect on your credit rating which is likely to affect your ability to access finance in the future.