Helping businesses get back on track

Sarah Prince is finance manager for Shrewsbury-based education resources supplier, WF Education Group, and co-director of Comics Salopia Shrewsbury festival. Here, she offers some tips to help businesses get back on track:

Cash forecasting – Spending the time to construct a simple template can assist you greatly in assessing the impact of Covid19 and to take appropriate action. Ideally, you should forecast for a minimum of four weeks.

Credit terms – Partner with suppliers to ensure your supply chain is healthy, are you able to support one another to ensure your customers’ needs are met? Identify large payments and negotiate better terms, i.e. a quarterly rent in advance invoice could be paid monthly.

Build relationships with your customers to ensure you are prioritised on their payment lists. Public run bodies such as councils are encouraged to pay suppliers, ensure your invoices are submitted on time.

Margins – When demand outweighs supply, prices inevitably rise and you need to re-examine your margins. Consider alternative suppliers, exploring a reduction in direct and indirect costs, and perhaps even increasing your sales prices.

Insurance – review your cover and risk exposure within a Covid-19 climate.

VAT – 30th June was the last month and quarter for any VAT return payment deferments until 31 March 2021. Cancel your direct debits online and with your bank. Remember to reinstate the direct debits after this period, and ensure all returns are submitted in a timely manner to avoid penalties and interest. If you are in a repayment position, consider switching from quarterly to monthly returns to ease cash flow.

Job Retention Scheme– Although the scheme is closed to new employees joining, from July 1 there is flexibility in bringing back employees for any amount of time or shift pattern. From August, employers needs to start meeting the employer NICs and pensions costs. From September, the wages cap reduces by 10% each month until it finishes in October, with employers making up the shortfall. Include these costs in your forecast.

SSP reclaims – You may be eligible to reclaim Covid19-related sick pay for current and former employees; review the details online.

Rates Holiday – Available to the retail, hospitality and leisure (RHL) sector, as well as small businesses. Most should be automatic but check eligibility and contact Shropshire Council if you are still paying.

Grant Funds - Available for small businesses for up to 10k, and for the RHL sector for up to 25k. If your business is not eligible for these, Shropshire Council has released a £4.5m extension grant for those with fixed costs and can demonstrate losses on first-come first-served basis.

Loans - If you need to consider a loan, there are different routes depending on the size of your business. If one lender does not approve your application, try another:

For SMEs: Coronavirus Future Fund

The Bounceback Loan (this is 100% government guaranteed, currently most lenders allow you to borrow to repay existing finance with higher interest rates)

The Corona Business Interruption Loan (80% government guaranteed, you can apply to switch to the Bounceback Loan before November 4, 2020).

For Large companies:  The Coronavirus Large Business Interruption Loan; COVID-19 Corporate Financing Facility.