It’s important to make sure you know your numbers.
If you are one of the many self-employed at home right now, one of the biggest issues on your mind will be your cash flow. The government may have offered some help, but we’re not going to see it this month.
As any fan of Dragons Den could tell you, one thing that’s vital for your business is to know your numbers. Right now is a really good time to take a look at your cash flow and prepare your business and home finances.
Get ahead of your tax return.
Yes, the tax year only just ended, and you’ve got plenty of time before you need to submit your next return. But why leave it? Get ahead of your paperwork while you have the spare time. Organise your receipts and invoices, gather together your bank statements and get everything ready to send to your accountant, or if you prefer, to do it yourself.
Not only will this save time later in the year, it may be the information you need to make a claim when the proposed help lines open.
Please do remember that although you can choose to defer your tax payments, it does still have to be paid at a later date. In addition, Tax Returns do still need to be completed.
Bring your business cash flow up to date
Many self-employed workers tend to work on a week to week basis – if there is money in the bank then everything is fine. Over the next few months the incoming cash will be going down – but the outgoing bills won’t stop.
Take a look at your cash flow and work out your income and outgoings per month. It’s better to get ahead than to be worried when payments come due. Review your bills to see which ones you can cancel or suspend. If you have finance agreements or rent to pay, and you are worried about being able to cover the cost, then speak with the companies involved. Many of them are deferring payments until things return to normal.
Over the last few weeks I have been asked about deferred payments a number of times, and I do want to really stress that a deferred payment does not mean you are getting that service / rent for free. You will be agreeing a payment plan that increases your monthly payments at a later date, until the outstanding amount has been brought up to date. So, if you can still pay it now, it may be better to do so.
Consider your personal bills and finances now
Just as you have with your business, review your personal cash flow. What is coming in, and which bills do you need to pay out? Could you defer mortgage or rent payments, finance agreements and so on?
Many of us enter into subscriptions for small services without really considering the cost of those bills. Netflix may be essential in your home right now, but do you need Sky Sports as well – especially as they have no live games to show.
When was the last time you compared your utility bills and checked you are with the best provider, or reviewed your telephone, broadband and mobile subscription? You might be surprised to see how much you are paying for services you really don’t use anymore.
I have discussed many options with clients in the last few weeks, including whether we need to make payments on things like car insurance this month. Remember that while you are saving money on fuel, it is still a legal requirement to have insurance and tax if you do have to go out.
Get information about the benefits you may entitled to
There are a lot of different benefits available, and it can become confusing knowing what you may be entitled to. In fact, many people don’t claim as the forms themselves are too complicated to fill in.
Speak with your accountant to see what you may apply for, particularly if you are looking at the Business Interruption Loan Scheme. As accountants complete these forms every day, it is far quicker and less confusing for us to fill it in, or to advise you on each stage.
You may be due some refunds
Finally, don’t forget to chase up any refund you might be due from cancelled trips and bookings. If a refund looks unlikely, could you postpone the booking or rebook for later in the year? It’s good to have something to look forward to.