SMEs need to be prepared for Christmas and beyond
No doubt your Christmas preparations are in full swing but while you’re decorating your tree it is also worth thinking about preparing your business for the holiday season and the new year ahead. The ICAEW has issued advice for SMEs as they face a possibly turbulent winter. With many having tax bills due for payment at the end of January 2015, businesses need to be prepared for any frostiness, especially if they experience poor Christmas sales. There is, however, a number of practical steps that businesses can take to ensure that they make it through the winter and start 2015 with all guns blazing.
A not so merry Christmas
Many small businesses experience their highest sales during the festive period. However, experts are undecided on whether consumers will splash out this year so you will need to be prepared if your sales fall short. SMEs should compile a detailed cashflow forecast and make sure they have sufficient money for trading in early 2015; this is often a slack time for businesses. Try to plan your cashflow to be as flexible as possible and schedule deliveries from suppliers only when you need them. It would also be wise to secure the best finance. If you do need extra finance to cover shortfalls research the best deals to avoid unnecessary expense. A bank overdraft may be the most effective way to bridge potential lulls in trading.
A taxing time of year
Remember that the tax deadline is January 31 and you will have to fill in the self-assessment form online to avoid a penalty. If you’re self-employed, have relatively simple tax affairs and your annual business turnover was below £81,000, you can use the short version of the self-employment supplementary pages when filing a tax return. If, however, you have more complex tax affairs and your annual business turnover was £81,000 or more, remember to use the full version of the self-employment supplementary page when filing a tax return. If you expect to miss a tax deadline, make sure you contact the authority concerned immediately as you may be able to get more time to pay or to make ad hoc or monthly payments.
Business recovery planning
It has been a particularly mild year in terms of the weather but things can change very quickly. So how do small businesses avoid any unforeseen circumstances and what risks should they be concerned about? Continuity planning is not just about recovery from disaster such as flooding or fire but can also cover IT systems failure, the collapse of a key supplier or customer, fraud and even reputational damage. To start, businesses need to address all critical operations and identify and prioritise risks. A checklist should include: 1. Plan actions following an incident, including who needs to be notified. Have a cascade plan for staff 2. Test systems for responding to fire, explosions, flooding, snow etc 3. Know how to get operations up and running as quickly as possible. 4. Talk to your insurance broker (if you have one) about what is covered by insurance 5. Protect management and financial information. Most businesses keep financial and management data electronically or “on the cloud”. It is vital that financial and other valuable information is protected and the business undertakes regular back-ups. 6. Protect IT which is vulnerable to attack, hackers, virus and spam as well as ISP and telecoms line failures.