Understandably many business owners are struggling at the moment as they deal with the implications of the COVID-19 pandemic. While the expertise of an accountant can be valuable at any time, it could make all the difference during the ongoing uncertainty.
While the government has taken some steps to support small businesses, many owners are finding it’s not enough. A record number of small business owners are planning to close their firms over the coming months, according to the Federation for Small Businesses (FSB). More than 250,000 businesses are expected to close their doors and many more are being forced to reduce staff, increase debt, or freeze growth plans.
Small and medium-sized enterprises (SMEs) make up around 99% of the six million businesses in the UK and employ more than 16 million workers. Supporting business owners during this time is essential.
While we have been offering financial support to our business owner clients throughout the pandemic, there are some key areas where an accountant can complement our advice.
- Providing support when accessing government funding
To support businesses during the pandemic, the government has launched several schemes, including the Coronavirus Job Retention Scheme and Bounce Back Loans. At a time of uncertainty, these can be incredibly important for business owners.
The majority of SMEs have used at least one support scheme. However, businesses that don’t employ an accountant are far less likely to take advantage of these lifelines, according to research from Unbiased. Over a third (36%) of SMEs without an accountant have not used any of the support schemes. Businesses that use accountants for more specialised tasks, such as credit control or business planning, are more likely to have built a working relationship and have used at least one of the support schemes on offer.
- Accessing tax allowances and benefits
Tax allowances and benefits are areas where accountants are valuable for businesses. With multiple options and complex terms, it can be difficult for a business owner to know what’s available to them. Many may also struggle to invest the time to ensure they’re taking full advantage of what’s on offer.
At a time when cash flow is important, the possibility of saving money or receiving a capital injection could mean the difference between a business making it through the pandemic or collapsing. Many business owners are likely to be missing out on tax breaks that are vital without the advice of an accountant.
- Support managing debt
Unsurprisingly, some businesses are taking on debt to see them through the current economic situation. While it can keep them going in the coming months, it’s important they have confidence in the steps they’re taking. Again, understanding debt management is something accountants can help with at any time, but it’s particularly important now.
Business owners need to understand how debt will impact their long-term plans and should have confidence in their position to repay it over the coming months and years. Having an accountant to go through debt with them can take a weight off their mind and mean they’re able to focus on other tasks.
- Ensuring a long-term plan is in place
It’s easy to see why many businesses are focusing on the here and now, but some could be sacrificing their long-term plan and security.
As with personal finances, a clear long-term plan can help business owners forge a path for success, even when the unexpected happens. While adjustments may be needed, discussing these with an accountant means a business owner is far less likely to make knee jerk decisions that could affect their financial position even after the pandemic passes.
- Help to spot growth opportunities
While COVID-19 and lockdown are harming many businesses, that doesn’t mean there aren’t opportunities for growth and investment.
Firms that can support schools in delivering home learning and businesses offering takeaway food are just some of the firms that may have seen opportunities arise due to the restrictions. While opportunities are exciting, it’s crucial they have a solid foundation in place and have the resources to take advantage of them. Working with an accountant means businesses can seek professional advice about ensuring they have capital in place, developing a long-term growth plan and much more.
Why business and personal planning is important
For small business owners, their personal finances and that of their business are often intertwined. It may mean they assume they need either an accountant or financial adviser, but they’re likely to benefit from both services especially when they work together. It can mean they’re in a position to take full advantage of tax allowances, from their personal pension to reducing corporation tax, and effectively plan for the future in terms of their life and that of the business.
Please contact us If you’d like to learn more about working in partnership with Beaufort Financial to deliver support to small businesses.