Better to have a plan

Whether you have a 31 March accounting year end or any other month in the year, it is imperative that you have a plan. This alert is an offer to support your business by helping you create a business financial forecast, maybe transfer it to your accounting software and produce periodic reports to monitor progress.

If we have learnt anything from the trials and tribulations of the past two and a half years, it is that ‘normality’ has become a fluid state of affairs.

Business challenges

The following bullet points set out some of the external challenges we will need to deal with this year:

·        Inflation – rising and set to peak at 10%.

·        Supply chain delays and price rises – the price of many commodities is on the rise due to the war in Ukraine, Brexit issues, and transport difficulties continue to create delivery delays.

·        Staffing – shortage of skilled and unskilled labour.

·        Rising taxes – recent NIC increases, the forthcoming increase in corporation tax and static personal tax allowances will combine to reduce our personal and business post-tax earnings.

 

Your business plans

 

Wading blindly into these challenges is like driving on a motorway with your eyes closed.

At a minimum, you should examine:

·        The security of your sales forecasts and the likelihood of growing sales.

·        The maintenance of supply lines and factoring-in price increases.

·        The cost of labour – will you need to consider pay increase to keep your team together?

·        Overhead costs.

·        Investment in new plant or other equipment.

·        Your own drawings/salary/dividends.

·        Cash flow implications.

·        The need to raise more capital or other funding for your business.

·        Solvency.

We would suggest, at a minimum, a forecast of profitability, cash flow and solvency to cover these challenges.

Call now to discuss your planning needs