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Being in financial distress is incredibly worrying for any business owner. When you’re facing County Court Judgements (CCJs), mounting debt and the possibility of insolvency, it can seem like there’s very little light at the end of the financial tunnel. The latest report from insolvency experts at Begbies Traynor shows a record number of UK businesses finding themselves in financial distress. Numbers have increased by 50% from September to December 2024, with 46,583 businesses falling into the category. But finding your finances in this perilous state doesn’t have to be the end. There are ways to mitigate the damage and get your business back on track. What qualifies as ‘financial distress’? Financial distress is defined as ‘being in significant difficulty in meeting your financial obligations’. In essence, it will usually mean that you no longer have the cash or liquid capital to pay your bills, cover payroll costs or repay your debts. But what causes a company’s finances to get into such a dire state? Insufficient cash flow A lack of cash is a primary cause of financial distress for many affected businesses. Unexpected expenses, delayed payments from customers and rising costs can all contribute to this negative cash flow position. Declining sales revenue A drop in sales also means a drop in revenue. This can be due to increased competition, changing consumer preferences or economic downturns. With less money coming in, you lose the ability to meet your financial obligations. Rising costs Skyrocketing costs of raw materials, labour or energy can all have an impact. Higher costs and expenses eat into your profit margins, putting major strain on your cashflow and leaving you unable to cover your key outgoings. Excessive debt High levels of debt, particularly short-term debt, will lead to high interest payments. These increasing interest rates make it difficult to meet your financial obligations, and also make it unlikely that lenders will offer further funding. Poor management decisions Some of the causes of financial distress come from macro, external conditions. But poor strategic decisions, ineffective marketing and inadequate financial planning also play a significant part. Talk to us about overcoming financial difficulties If debt is mounting and your cash flow situation is looking dire, the time to take action is now ! The sooner you tackle the financial issues in the business, the sooner you can start to bring your debts under control, and your cash flow back to an acceptable level. Come and talk to the team about your financial worries. We’re here to help you get back on track and to secure the future of your business as a viable enterprise. Call us on 01904 787 973 or book a discovery call with Donald Inglis .
Being able to evolve over time is vital if you want your business to last. The market doesn’t stand still, so it’s important to diversify and to keep your offering fresh. You may well have a product range and a customer base that’s ticking over nicely. But customer and market needs can change very quickly. Blockbuster, for example, had a huge international business, but the invention of on-demand movies killed that business in just a few years. If you want to bake longevity into your business, it’s crucial to keep moving and reexamining the value that you bring to your audience. Here are five potential strategies for diversifying your business: 1. Introduce new products or services Expand your offerings by developing complementary products and/or services. This could mean bundling existing offerings, or creating entirely new lines to cater to existing and new customer needs. 2. Diversify into new sectors It’s easy to get comfortable in your existing market niche. But you’ll find more opportunities by entering new, related or unrelated markets. This cuts your reliance on a single market, cutting down the risk of putting all your eggs in one basket. It also introduces your brand to a whole new customer audience. 3. Deepen your market penetration Going deeper into your existing target market can reveal a whole new audience. Think about what you can add to make your offering more attractive. Put cross-selling and upselling strategies in place to increase the sales potential from existing and new customers and listen hard to customer feedback. 4. Expand into new territories Having a new market to sell into is a great way to boost your sales opportunities. Find an international market that has a relevant customer demographic and tailor your products and services to this new foreign audience. Bear in mind though the compliance, customs and tax requirements of going international. 5. Form strategic partnerships Your reach and revenue potential is greater when you collaborate with other businesses. Entering into a partnership helps you offer joint products or services, leverage your partner’s customer base, or explore new distribution channels. This could be a partner in your existing market, or in a complementary market. Talk to us about diversifying your business offering If your aim is to optimise your business, diversification is a real must. It introduces you to new sectors and audiences, increases your sales opportunities and reduces risk. Talk to our team about ways to diversify your offering and add a new angle to your strategy. Call us on 01904 787 973 or book a discovery call with Donald Inglis .
It’s tough making a success of your business alone. So, why not partner with other businesses to help form a strategic partnership that benefits you both? In this series, we’ll look at some key ways to optimise your business, exploring different avenues to evolve your enterprise and create a legacy you can be proud of. Let’s take a look at some different options for exploring strategic partnerships. 5 ways to find your ideal strategic partner Partnering with another company really helps you expand the reach and capabilities of your existing business. And by working with new people – and with a new audience – you also bring new ideas to the table and can begin to innovate in new spaces Here are five ways a strategic partnership adds value: Explore new markets Partnering with complementary businesses gives you access to new industries, sectors and customer segments. It can be an amazing way to expand your market reach by working with a company that already has a profile in this space. Boost your revenue streams You can generate new revenue streams by offering joint products or services with your new business partner. You can also cross-sell to each other's customer base, or explore new distribution channels. Reduce your costs Working with a trusted partner means you share resources, such as marketing, logistics or technology. This makes it easier to run campaigns and reach a new audience, while also reducing costs and giving your margins a boost Get more innovative With a partner on board, you can collaborate on new ideas and develop truly innovative products. You may also be able to access their technology, infrastructure and expertise to enhance your research and development (R&D). Improve your brand visibility Partnering with well-established brands gets your name seen by a whole new audience. It’s a great way to enhance your brand's visibility and credibility, bringing in new customers and other potential partnerships with brands. Talk to us about finding your perfect strategic partner Creating a broad network of partners, supporters and new customers is an amazing way to optimise your business – and your potential to reach a whole new customer base. Talk to our team about partnering with new strategic partners. We can introduce you to other companies in our network to find your perfect collaborators. Call us on 01904 787 973 or book a discovery call with Donald Inglis .
Your people are one of the most critical elements in your business. But are you doing everything possible to provide a caring, supportive workplace that also drives the success of your business? In this series, we’ll look at some key ways to optimise your business, exploring different avenues to evolve your enterprise and create a legacy you can be proud of. Let’s look at ways to improve your employee experience and your connection to the team. 5 to improve your employee relations as an employer Studies show that happy workers are more productive. Offering your people a working environment where they can flourish is part of being a great employer. But what are the key ways to build these employee relationships and nurture your team? Here are five ideas for creating the best possible workplace for your employees: Invest in your employee development Make sure you provide opportunities for professional growth. Offer your employees access to training programs, workshops, conferences and mentorship programs. It’s a chance to enhance their skills, boost morale and make them feel truly valued as team members. Create a positive work environment Cultivate a workplace that feels positive and supportive of your employees. Be open and transparent with your communication, listen to employee feedback and have a strong focus on employee wellbeing. This includes offering benefits, flexible work arrangements and other team perks. Recognise and reward your employees When an employee goes above and beyond, make sure it’s recognised and rewarded. You could do this through performance bonuses, employee-of-the-month programs or even extra time off in lieu. Being rewarded, and feeling truly valued, can be an amazing motivator. Empower employees to do more One of the best things you can do for your employees is give them autonomy. Being trusted to come up with their own solutions, processes and ideas is key to making people feel as if they own their role. Employees feel fully involved in your progress and will help you push things forward. Put wellbeing at the heart of your culture Work can be stressful. But by paying close attention to employee wellbeing you make sure no-one gets overwhelmed or left behind. Think about running free stress-management programs, offering mental health support and checking in with every team member on a regular basis. Talk to us about your employee experience strategy Making sure you’re a caring and supportive employer is vital to your business strategy. With a team who feel valued, nurtured and encouraged, you’ll all be happier and more productive. To talk to our team about strategies for improving your employee experience, call us on 01904 787 973 or book a discovery call with Donald Inglis .
Keeping on top of your finances is a critical part of keeping your business on track. But are you doing everything you can to optimise your financial management? In this series, we’ll look at some key ways to optimise your business, exploring different avenues to evolve your enterprise and create a legacy you can be proud of. Let’s see how you can better control over your financial numbers. Having the right numbers at your fingertips One of the biggest causes of business failure with new startups is poor cashflow and a lack of capital. Having enough money to cover your expenses, pay your workforce and invest in growth is what separates the successful businesses and those that fall by the wayside. But what can you do to improve your cash position and keep yourself in the driving seat when it comes to managing the financial side of the business? Here are five simple things you can to get more proactive with your finances: Embrace financial technology and cloud accounting Make sure you’re using cloud-accounting solutions like Xero or QuickBooks, with integrated bank feeds, expense tracking, simple invoicing and a real-time view of your numbers. You can also use the advanced reporting features to get deep insights into financial performance.Use financial metrics and KPIs to monitor performance Develop a framework of financial key performance indicators (KPIs) including gross profit margins, operating expenses, customer acquisition costs and revenue growth rates. By tracking these metrics, you can gauge your performance, spot any financial threats and make well-informed decisions about your financial management. Forecast your cashflow position and potential challenges Use the latest cashflow forecasting tool to track your expected cash inflows and outflows. These projections give you an overview of your cash position for the months ahead, allowing you to top up your cash as required. It’s also sensible to build up some meaningful cash reserves, so you have capital behind you when cashflow gets tight. Work on your aged debt and debtor management It’s important that customers pay on time and that your payment terms are clear. Use your accounting software to send out automated reminders and have structured follow-up procedures in place for overdue payments. It’s also a good idea to offer early payment incentives and to nurture strong customer relationships to minimise your aged debt and improve cashflow. Get strategic with your working capital and access to finance Having a viable level of working capital in the business is a must. Explore the various financing options for boosting your capital. This can include business lines of credit, invoice financing or term loans to, all of which help to increase funding and raise the company’s capital. Talk to us about ways to improve your digital transformation There have never been more tools to help you manage your finances. By embracing the best in financial and accounting tools, you give yourself (and your finance team) the superpowers to become cashflow positive, with capital behind you to drive your business to new heights. If you’re looking to upgrade your financial management, come and talk to us. Our team will suggest the ideal accounting tech stack and the best ways to control your numbers. Call us on 01904 787 973 or book a discovery call with Donald Inglis .
HM Revenue & Customs’ (HMRC) Making Tax Digital initiative has been gradually evolving for several years now. But did you know that it will soon be mandatory for landlords and small businesses that pay tax through self-assessment to use HMRC’s digital tax system? Making Tax Digital for Income Tax & Self Assessment (or MTD for ITSA, as it’s more commonly known) is likely to be a major change for some taxpayers. So, are you ready for the upcoming MTD for ITSA rules? What is MTD for ITSA? Making Tax Digital (MTD) aims to bring tax into the digital age, moving from annual paper and online tax submissions to quarterly digital uploads of your tax information. Having to keep detailed digital records sits at the heart of MTD. Taxpayers will need to record all incoming and outgoing transactions using compatible accounting software, and then share this information in an approved digital format with HMRC. Who will be affected by the MTD for ITSA rules? MTD for ITSA is already at the beta testing stage and some self-assessment taxpayers have opted in to the system already. But if you’re a landlord or sole trader who falls into the following categories, MTD for ITSA will soon become a mandatory requirement: From April 2026, for those with qualifying income over £50,000 From April 2027, for those with qualifying income over £30,000 How do you get ready for MTD for ITSA? If you’re already using cloud accounting software to manage your finances, MTD for ITSA won’t be a major challenge. You’re already recording your numbers in a digital format and most of the popular accounting platforms will have MTD for ITSA templates you can fill out. But if you’ve not embraced the latest in accounting tech, it’s important to upgrade ASAP. To stay compliant, you’ll need to: Keep your records in a digital format Provide digital quarterly updates to HMRC Be able to provide your ITSA return information to HMRC through MTD-compatible software Talk to us about preparing for MTD for ITSA Contact us If you’re concerned about how MTD for ITSA may affect your finances, call us on 01904 787 973 or book a discovery call with Donald Inglis . We’ll advise you on the best accounting software and give you guidance on upgrading and preparing your bookkeeping, accounting and tax procedures for MTD for ISA.
Producing regular management information is one way to help improve your business decision-making. But looking at historical numbers can only tell you so much. In business, you want to know what the future holds. And to make truly informed decisions about your future strategy, it’s important to use forecasting tools to project your data forwards in time. By running projections, based on these historical numbers, and producing detailed forecasts, you can get the best possible view of the road ahead – that’s invaluable. Run regular cash flow forecasts Positive cash flow is vital to the short, medium and long-term success of your business. Without cash, you simply can’t operate the business efficiently. Running regular cash flow forecasts helps you overcome this challenge. With detailed projections of your future cash flow, you can spot the cash gaps that lie further down the road, and take action to fill these cash flow holes. Income can often be unpredictable, especially in challenging economic times. If customers fail to pay an invoice, or suppliers increase their prices, this can all start to eat into your available cash. Using forecasting, you can extrapolate your numbers forward to which weeks, months or quarters are looking financially tight. And with enough prior warning, there’s plenty of time to look for short-term funding facilities, or to get proactive with reducing your spending. Run sales and revenue forecasts Keeping the business profitable is one of the key foundations of making a success of your enterprise. You want your sales to be stable and your revenues predictable if you’re going to generate enough capital to fund your growth plans. And you need to know how those revenues will pan out over the course of the coming financial period. Revenue forecasts work much like a cashflow forecast. Instead of looking at your future cash position, a revenue forecast gives a projection of your sales and how much revenue is likely to be brought into the business in future weeks and months. With better revenue information, you’ll be more on top of your profit targets. You can manage your working capital in a more practical way. And you can improve your ability to invest in new projects, additional staff or funding of the long-term expansion of your business. Run different scenario plans What’s going to happen to your business in the future? None of us have a crystal ball to predict this future path exactly. But by looking at different possible scenarios, you can run projections to see what the potential outcomes and impacts may be. These ‘What-if scenarios’ can be exceptionally useful tools when thinking about big business decisions. What if there’s an economic recession? What if our sales increased by 25%? What if we raised our prices by 10% next quarter? What if we lost a quarter of our customers? By plugging the relevant data into your forecasting engine, you can run these scenarios and see how each option pans out. That’s massively useful when the worst (or the best) does happen. Update your strategy, based on your forecasts By making the most of your forecasting tools, you give your board, your finance team and your advisers the most insightful data and projections to work with. A good business plan is designed to flex and evolve to meet the needs of the changing market – and the changing needs of your own business strategy. By making use of your cash flow forecasts, revenue projections and what-if scenario planning, you give yourself the insights needed to update your strategy and your business plan. You can make solid, well-informed decisions and keep yourself one step ahead of your competitors. In the dog-eat-dog world of business, that’s a competitive edge that can make a huge difference. If you want to delve deeper into the positive benefits of forecasting, please do get in touch. We can showcase the latest forecasting software and apps, and show you the value that’s delivered through well-executed forecasting and longer-term projections. Call us on 01904 787 973 or book a discovery call with Donald Inglis .
Tech-savvy businesses are taking big strides in making software, AI and automation work for their enterprise. Going digital could be one of the smartest moves you make. In this series, we’ll look at some key ways to optimise your business, exploring different avenues to evolve your enterprise and create a legacy you can be proud of. Let’s explore how embracing the latest software tools helps you optimise your business. Going digital and putting tech at the heart of your business Cloud-based solutions and AI-driven tools are the foundation stones of a modern, digital-ready business. You might have legacy systems and operational processes that you know inside out, but if you’re not in touch with the latest tech this could be a major competitive disadvantage. Why are digital solutions so important for a streamlined and productive business? Let’s take a look at five important ways that tech can change the way you work: Move your infrastructure to the cloud Being able to connect to your business systems from anywhere with WiFi is a major advantage. Switching to Google Workspace or Microsoft 365 helps you collaborate remotely, share documents in real-time and centralise all your data storage and management. Cloud platforms are also cheaper to run, always run the latest software versions and scale with the business as you grow. Automate your routine tasks with AI Repetitive tasks are an important part of your operational processes, but they eat into your time and productivity. Automating these repetitive administrative tasks turns you into a more streamlined and efficient business. AI chatbots can manage first-level customer service tasks, ChatGPT can speed up your content marketing and tools like Zapier can be used to automate a multitude of different processes and operational tasks in the business. Switch to SaaS for your financial management Software-as-a-Service (SaaS) financial platforms, like Xero or QuickBooks, will transform the way you manage your finances and accounting. All your sales, transactions and expenses are managed in the cloud, giving you instant access to your numbers. You also have detailed reporting and automated metrics available to you. This is vital for making data-driven decisions. Analyse your business data Financial data isn’t the only data you should be analysing. Using platforms like Power BI, Google Analytics and specialist industry analytics software helps you understand your customers’ behavior, optimise your marketing strategies, predict the performance of your manufacturing processes or manage your inventory in smarter (and cheaper) ways. Get your cybersecurity up to scratch With so many systems now in the digital realm, watertight cybersecurity is a must. This means having strict encryption tech in place, training your people in good cybersecurity practices and making sure you have complete control of your various in-house and customer data sources. Talk to us about ways to improve your digital transformation Switching to digital systems and SaaS tools doesn’t happen overnight. This is a gradual process of bringing the latest tech on board and learning how to get the most value from the software. If you’re wanting to embrace the newest automation and AI tools, now’s the time to talk to us. Our team will be happy to review your systems and suggest the next tech upgrades that will deliver the most improvements to your business. Call us on 01904 787 973 or book a discovery call with Donald Inglis .
The statement of cash flows, (also known as the cash flow statement), shows how your business has generated and used cash (and cash equivalents) within a specific time period. For each of the reporting categories, receipts and payments are listed (money in and money out), and this is reported as a net increase or decrease in cash held for that category. The net change in all categories is added to the amount of cash on hand at the start of the reporting period to arrive at the current cash on hand figure at the end of the reporting period. It is another important financial statement to understand in conjunction with the Profit and Loss statement and the Balance sheet. These three reports provide a good understanding of the financial position of your business. How does it work? The cash flow statement integrates the information provided by the profit and loss statement and the balance sheet into a current cash position. The cash flow statement is reported on a cash basis, while your other financial statements are usually reported on an accrual basis. Accrual income (from the profit and loss statement) is converted to cash by calculating the changes in the balances of asset and liability accounts. Report categories The statement of cash flows is organised into sections that report on different types of business activity. Operating activities – all business income, expenses, assets and liabilities (except for those assets and liabilities reported in investing and financing activities). Investing activities – the purchase and sale of long-term investments, property, plant and equipment as well as security deposits paid to suppliers or received from customers and dividends received. Financing activities – the changes in balances of equity accounts, for example, issuing and repurchase of stocks and bonds and payment of company dividends if applicable. Loans are also included in financing activities. Formal financial report packages usually include notes to the financial statements. The notes contain supplemental information that explain significant items or activities that did not involve cash transactions. The notes may also include detailed reporting of categories that may have been reported as summary totals only in the profit and loss, balance sheet and statement of cash flows. Other items such as taxes, employee provisions, risk management or related party transactions may also be detailed in the notes. Why is it useful? The statement of cash flows gives you a valuable measure of cash flow in and out of the business over a given period. It shows the ability of the business to pay its bills and fund its operating activities. This gives you a picture of overall performance. It also shows the relationships between assets, liabilities, equity and cash accounts. It shows changes and movements over time, whereas the balance sheet and profit and loss reports show account values at a single point in time. The statement of cash flows gives you vital information on your business. How strong is your cash position? What is the long-term outlook for your business? What activities generate the most cash flow? What is the relationship between your net income and your operating activities? If you’d like to understand your financial statements, cash position and future outlook in more depth, arrange a discovery call today . We’ll help you identify and appreciate the strengths of your business.
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