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Six-month cash flow template (small business no debtors)

If you receive cash or card for sales at the point of sale, this could help with estimating cash surplus / deficit for the next 3-6 months’ time.

 

	Cash estimates
	March	April	May	June	July	August
A Cash from sales
B Cash out to suppliers
C Employee / owner costs
D Distribution and Marketing costs
E Heat light and similar Costs
F Rent and rates
G Other
H TOTAL COSTS (Add B to G)
Net Cash surplus or deficit (sales less costs) A less H PUT THIS FIGURE IN SURPLUS / DEFECIT BELOW
Bank Balance brought forward
Surplus (deficit)
Balance C/CF

 

Put your opening bank balance at end of February add the Trading surplus or the deficit to work out your balance at the end of March. Carry the balance forward into April. This is an estimate and you may want to roll the figures out for 3 months ahead. If you are going to struggle with cash to keep your business going then talk to us immediately.

SMALL BUSINESS EMERGENCY ACTION PLAN

 

Not all businesses are going to survive the next three months. If your customers are in isolation and cannot get to you or you cannot deliver or they cannot pay you, there is the reality of reduced or no sales for the next three or so months and even beyond if the virus remains.

 

The situation we face is one we cannot change we must accept that and it’s the same for everyone – we know because our business depends on your success.

 

What you can do is stay healthy and ensure your loved ones are too. After all, if the business closes and you are healthy you can start again. The reverse is not true.

 

The Government has stepped up to the plate and we will be letting you know how to get help in due course. We believe in planning for the worst and hoping for the best so work through the following action points. Call us immediately you see a problem in remaining viable.

 

So, here’s what you need to do if your sales are going to take a hit.

 

1. Stay healthy, follow the Government guidelines for you, your family, co-workers, employees and community. Work from home where you can manage administration.
2. Work out your expenses (including salaries) for the next three months.
3. If you are in retail – work out your breakeven point by dividing your costs by the Gross Profit margin. That’s the sales figure you must achieve to cover expenses.
4. If you are in the service sector add your expenses to how much do you need to live on and that’s the breakeven point in terms of billings or fees you need to charge over the next three months.
5. For hotels, pubs and restaurants contact us immediately. For manufacturers work out product sales and do the same calculation.
6. If it looks like you are not going to be able to operate at break-even look at your cash or bank balances – have you got enough money saved to survive after paying anyone you owe money?
7. Estimate your cash flow over the next three months using the attached resources to help do this.
8. If you need help in doing these calculations talk to us – we can talk you through these for you. Without the figures you cannot make clear decisions.
9. Once you have a grasp on your figures and you consider you have a “viable” business ( can you survive for the next 3 months):
   1. There is Government support and we will provide you the information and guidance on how to apply to this help and if you qualify.
   2. Talk to your bank if you have loans or an overdraft. They will be supportive of viable businesses.
   3. Get your members of staff involved in a discussion of likely trading conditions and get their input on reducing costs and maintaining revenues.
   4. Review your list of products and services and eliminate those that are unprofitable or not core products/services.
   5. Get rid of won’t pay customers.
   6. Review your debtors list and chase up overdue invoices (if appropriate).
   7. Offer existing debtors extended payment terms and/or discounts.
   8. Agree extended payment terms with all suppliers in advance.
   9. Put extra effort into making sure your relationships with your better customers are solid.

 

10. If your business is not viable – talk to us and we will run through the options.

 

 

Above all stay strong! Remember your health and welfare is more important than anything else just now. We will help you every step of the way. Together we will beat this!

The copy has been taken and edited from the Government COVID-19 Web pages:   https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-through-deferring-vat-and-income-tax-payments

 

#1 GOVERNMENT SUPPORT FOR BUSINESSES

 

On Friday 21^ST the Chancellor set out a package of measures to support public services, people and businesses through the period of disruption caused by COVID-19.

 

The package of measures to support businesses includes:

• Coronavirus Job Retention Scheme
• Deferring VAT and Income Tax payments
• A Statutory Sick Pay relief package for SMEs
• A 12-month business rates holiday for all retail, hospitality and leisure businesses in England
• Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
• Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
• The Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
• A new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
• HMRC Time To Pay Scheme

 

We will keep you informed about the details of each of these packages and how to apply. Be safe and stay strong!

 

 

 

#2 CORONAVIRUS JOB RETENTION SCHEME

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. All UK businesses are eligible.

 

Eligibility:

 

You will need to:

• designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
• submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

 

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

 

#3 DEFERRING VAT AND INCOME TAX PAYMENTS

The Government will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.

 

VAT

For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.

 

All UK businesses are eligible.

 

How to access the scheme

This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

 

INCOME TAX

For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.

 

If you are self-employed you are eligible. This is an automatic offer with no applications required.

 

No penalties or interest for late payment will be charged in the deferral period.

HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.

 

#4 SUPPORT FOR BUSINESSES WHO ARE PAYING SICK PAY TO EMPLOYEES

The Government will make legislation to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:

 

• this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
• employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020
• employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
• employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
• eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
• the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.

 

You are eligible for the scheme if your business is UK based and your business is a small or medium-sized and employs fewer than 250 employees as of 28 February 2020.

 

#5 SUPPORT FOR BUSINESSES THAT PAY BUSINESS RATES

 

Business rates holiday for retail, hospitality and leisure businesses

 

The Government is introducing a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.

 

Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.

 

You are eligible for the business rates holiday if:

• your business is based in England
• your business is in the retail, hospitality and/or leisure sector
• Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:
  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
  • for assembly and leisure
  • as hotels, guest & boarding premises and self-catering accommodation

 

How to access the scheme:

There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.

 

See: https://www.gov.uk/calculate-your-business-rates where you can estimate the business rate charge you will no longer have to pay and further guidance can be found at: https://www.gov.uk/government/publications/business-rates-retail-discount-guidance

 

 

 

#6 CASH GRANTS FOR RETAIL, HOSPITALITY AND LEISURE BUSINESSES

The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property. For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000. For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000.

 

You are eligible for the grant if:

• your business is based in England
• your business is in the retail, hospitality and/or leisure sector

 

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

• as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
• for assembly and leisure
• as hotels, guest and boarding premises and self-catering accommodation

 

Accessing the scheme:

You do not need to do anything. Your local authority will write to you if you are eligible for this grant. Guidance for local authorities on the scheme will be provided shortly. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

 

To find your local authority: https://www.gov.uk/find-local-council

 

#7 SUPPORT FOR BUSINESSES THAT PAY LITTLE OR NO BUSINESS RATES

The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

 

 

You are eligible if:

• your business is based in England
• you are a small business and already receive SBBR and/or RRR
• you are a business that occupies property

 

How to access the scheme

You do not need to do anything. Your local authority will write to you if you are eligible for this grant. Guidance for local authorities on the scheme will be provided shortly.

 

Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

 

To find your local authority: https://www.gov.uk/find-local-council

 

#8 SUPPORT FOR BUSINESSES THROUGH THE CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME

 

A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch this week to support primarily small and medium-sized businesses to access bank lending and overdrafts.

 

The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.

 

Businesses can access the first 12 months of that finance interest free, as government will cover the first 12 months of interest payments.

 

You are eligible for the scheme if:

• your business is UK based, with turnover of no more than £45 million per year
• your business meets the other British Business Bank eligibility criteria

 

How to access the scheme

The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

 

All the major banks will offer the Scheme once it has launched. There are 40 accredited providers in all.

 

You should talk to your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them. This will help your finance provider to act quickly once the Scheme has launched. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.

 

The scheme will be available from early next week commencing 23 March.

We will keep you informed on how to apply as the details emerge.

 

#9 SUPPORT FOR LARGER FIRMS THROUGH THE COVID-19 CORPORATE FINANCING FACILITY

Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies.

 

This will support your company if it has been affected by a short-term funding squeeze and allow you to finance your short-term liabilities. It will also support corporate finance markets overall and ease the supply of credit to all firms. All UK businesses are eligible. he scheme will be available early in week beginning 23 March 2020. We will provide information on how to access the scheme here shortly. More information is available from the Bank of England: https://www.bankofengland.co.uk/markets/market-notices/2020/ccff-market-notice-march-2020

 

#10 SUPPORT FOR BUSINESSES PAYING TAX: TIME TO PAY SERVICE

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time to Pay service.

 

These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. You are eligible if your business pays tax to the UK government and has outstanding tax liabilities.

 

If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559. If you’re worried about a future payment, please call them nearer the time.

 

#11 INSURANCE

Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim as long as all other terms and conditions are met.

 

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics

WORKING FROM HOME – MAKING SURE YOUR EMPLOYEES STAY MENTALLY STRONG.

 

With the Government recommending those that can, work from home, it is important to note that for some people it’s not the perfect set up.

 

There is the obvious advantage of no commuting and technology means we can have more autonomy over our time but for some people we will need to monitor their mental health.  Put simply working from home doesn’t work for everyone.

 

For some people, working from home can put their mental health at risk, causing feelings of isolation and disconnection and the feedback and encouragement they receive form their fellow workers in the office can be critical to their productivity.

 

Working remotely may create a pressure “to appear busy” or to be online throughout the working day. This can cause stress.

 

So, what do the experts recommend?

 

Working from home is a new phenomenon for many accountants, so issue guidance and be relaxed about the results in the first week or so as people find their way.

 

Suggested guidance for accountants:

 

• Guidance will firstly be about technology and then setting the parameters that it’s OK to work in the morning and take a couple of hours out.
• Let people know they should set up a “work zone or space” and not the sofa!
• Encourage “self- care time” for meditation or exercise. One firm we know does a group video meeting with a personal trainer 3 times a week for basic fitness (let’s be honest we are all different shapes and sizes!).
• Hold a team Skype, GoToMeeting, Facebook Messenger call or other group telephone call for 20 minutes each morning at 9.00am. Seeing your co-workers is a boost and just to know “you are all in it together” helps.
• Encourage a down time of between 12 and 2 and no work after 5.
• Recommend no emails before 12 so people can get their heads down and do the processing or preparation of returns and accounts they are hired for.
• If you are not paperless then allocate someone to fetch and carry files to employee’s home addresses.
• Go paperless for all working papers (email 2020 if you need guidance).
• Let people come into the office alone if they need a day away from home.

 

Send your people fruit and deliveries of “goodies” from time to time.

 

This is not a comprehensive guide and 2020 encourage you to talk to your people about what they want and how the arrangements work for them individually. We will offer more comprehensive guidance in due course.

 

Below are some key Government websites where you can access the latest information:

 

• Government action plan:
  https://www.gov.uk/government/publications/coronavirus-action-plan

 

• Guidance on social distancing and stay at home:

https://www.gov.uk/government/topical-events/coronavirus-covid-19-uk-government-response

 

• Travel advice:

https://www.gov.uk/guidance/travel-advice-novel-coronavirus

 

• Support for businesses:

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

 

• Tax helpline to support businesses who are concerned about paying their taxes:

https://www.gov.uk/government/news/tax-helpline-to-support-businesses-affected-by-coronavirus-covid-19

 

• Guide for employees, employers and businesses:

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19

 

• Budget 2020: tax-related documents:

https://www.gov.uk/government/collections/budget-2020-tax-related-documents

 

• NHS Coronavirus (COVID-19):

https://www.nhs.uk/conditions/coronavirus-covid-19/

 

Support for businesses who are paying sick pay to employees:

 

The Government will pass legislation shortly to allow small and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:

 

• this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
• employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020
• employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
• employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note
• eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force

 

We will keep you fully informed of any developments on when the repayment mechanism for employers will be finalised.

 

Support for businesses that pay business rates

 

There will be a business rates retail holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.

 

Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.

 

A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000.

 

Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority. Guidance for local authorities on the business rates holiday will be published by 20 March.

 

We will keep you informed of these developments as and when they happen.

 

Support for businesses that pay little or no business rates

 

Additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR) has been announced by the Government. This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs.

 

If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply.

Funding for the scheme will be provided to local authorities by government in early April. Guidance for local authorities on the scheme will be provided shortly.

 

We will keep you up to date with the latest news.

 

Support for businesses through the Coronavirus Business Interruption Loan Scheme

A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch shortly to support businesses to access bank lending and overdrafts. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value. Businesses can access the first 6 months of that finance interest free, as government will cover the first 6 months of interest payments.

 

Details will follow and we will support any clients needing assistance with obtaining this support.

 

Support for businesses paying tax

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time to Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

 

If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559. Please talk to us if you want our help here.