Search form here
I heard a wonderful phrase to describe the current situation the other day. Someone said they would be glad when they could once again run a business in a situation that wouldn’t be mentioned in history books in a hundred years. It’s a valid point. I think, perhaps because we are living in them, we forget just how unusual things have been and still are. The effect of all the uncertainty and change on business really needs to be assessed in the cold light of day.
If you read our last blog on the importance of cashflow at the moment, you have probably started to think about one of two of the points below in terms of the impact they may have on your available funds.
HMRC will be back in the game
During the covid outbreak, HMRC took a softly, softly approach to chasing debt. They have been understanding, willing to compromise and basically not chasing outstanding debts with any real vigour. That has changed. They are back and, it would seem from what we are hearing, with a very clear agenda to collect money owed to them. If you have any outstanding bills for tax, VAT or national insurance, expect them to be in touch soon.
Other creditors will also be back
HMRC weren’t the only ones who were keeping a low profile. Many debt collectors were also holding back on aggressively chasing outstanding monies owed to them or their clients. We are seeing some businesses struggling with arrears on arrangements and bills from years ago that have suddenly resurfaced. Now is a very good time to make sure you are not suddenly going to need to find a long-forgotten obligation causing you problems.
Saddled with new debts
The ghost of Bounce Back Loans (BBLs) and other support is still haunting many businesses. The fact is that if you did not get back to your expected levels of profitable trading as fast as you thought then a BBL can be a real problem. If you have been using the support options since your BBL became active for payment, then you are probably starting to run out of ways of compensating. A BBL, as useful as it may have been at the time, is still a big debt to be paid. Coupled with the two points above it could be a real problem.
Your customers have similar problems
As they return to normal you may find that your clients are also suffering the same issues as you are. Some of them may even, sadly, go out of business owing you money. Others may have already done so, and there is a good chance that many of them will be robbing Peter to pay Paul now and again. It’s time to make sure you know where you are. Relationships with suppliers and customers are going to be vital during the coming months so it’s best not to take things for granted and keep in touch and as informed as possible.
Be prepared to change
One of the biggest dangers coming out of the pandemic could well be trying to get back to the old normal. Be ready to embrace change. Whether that is in credit control, changing your pricing, altering your terms or whatever you need to do to adapt to the new normal. To quote Darwin, “It is not the strongest of the species that survives... It is the one most adaptable to change”.
Whatever happens in the next few months it is going to be tough for some businesses. The best way to survive it is, as always, to have regular cash coming in. Our article on post lookdown cashflow talks about the importance of reviewing how and when your money will be coming into the business.
If any of the above points are a concern, then you may have a building financial issue. If you are worried about insolvency or anxious you may not be able to continue with your business because of mounting debts, call us or use our online diary to book a free consultation. We are waiting to help but, the longer you leave it, the harder it will be so please, get in touch with us if you are worried.
More information
‘Am I insolvent’ – (includes online diary)’
All Blogs