Would you drive a car blindfolded?

I’d like to think none of you would dream of it. Without cash flow planning for the next 12 months, unless you are sitting on a big pot of cash and don’t care if you waste it, that is exactly what you will be doing with your business.

It’s now more important than ever that you get on top of your cash flow to start managing it and putting planning in place to navigate the next 12 months. Especially as August signifies two big cash flow hits for a lot for businesses;

1. June VAT quarter due by 7th August

This is the first VAT quarter due to be paid since the pandemic started.

For many businesses, you will have cancelled your direct debit with HMRC to stop the March VAT quarter being taken automatically which was the advice directly from them. You need to ensure this Direct Debit is set up 3 working days before you submit your VAT return otherwise it won’t collect on time.

If your June VAT quarter doesn’t reach HMRC by 7th August, you could be at risk of penalties starting from 5% if your VAT has been late previously.

If you need support with ensure your bookkeeping and accounts are up to date so you can get on top of your VAT returns, please contact us and we can do all of this for you, so you can rest easy knowing your VAT returns have been submitted on time.

2. Furlough starting to be unwound

From August, the furlough grant will no longer cover the cost of employer’s national insurance or employers pension contributions.

This is just the start of cash flow getting tighter and tighter for businesses that aren’t back to fully trading or who have built up big arrears in rent, loan repayments and VAT while closed.

There are a number of significant factors to take into account for cash flow planning:

  • For most businesses December is the worst month for cash collection (unless you are in the Christmas business)
  • Corporation tax payments for March 2020 year ends is due to be paid by 1st January 2021
  • Personal tax payments for July 2020 and January 2021 need to all be paid up by 31st January 2021
  • VAT and other overdue debts with HMRC need to be caught up by 31st March 2021

As mentioned by Malcolm on Friday in the latest of his articles on the Ten Vital Ingredients for a recovering business, several of our clients use our 5-minute cash flow planner as the start of getting a good picture of their businesses cash flow cycle every year and plan for the money that needs to be set aside for all the taxes ready for when due.

Please complete the form below to download your copy or ask your client manager for a copy of 5-minute cash flow or add it to your quarterly management accounts service we provide.

Once you have started with our 5-minute cash flow planner, another great tool we love talking about is what we call the Prior Year Report which shows you the profit and loss account for the same month for up to the last 5 years.

Nearly all businesses have some form of seasonality so it’s good to compare like with like. In times like this it may also help to put things into perspective as this could show you that whilst business is slower, it may compare to a previous year before you had grown or changed which allows you to dig into the memories of what your business looked like then, possibly number of staff, storage or office space required or what you did to achieve that growth and allow you to plan for how you replicate that now.

To hear more about our favourite reports and why they will be a powerful tool for your business, watch our video on the importance of accurate and relevant reports.


5 Minute Cash Flow Forecast Tool

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You need to act now

Cash flow planning is crucial to the success of your business and for you to be able to rebuild after Covid-19. For help cash flow planning in the short-term and/or long-term, please contact us on discovery@a4g-llp.co.uk or call 01474 853 856.

You can also take a look at our Cash Flow Forecasting service and Cash and Profit Improvement service and what they entail.

Contact me today!

Emma White



01474 853856

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