Recently, the media published many articles centered around the global recession is coming. Is this true? If it is, what can you do to keep your business thriving during recession?
Streamline your business operations during recession
It is time to audit your business operations costs, to see if you can get cheaper provider elsewhere with the same quality of service.
Generally, the UK electricity supplier always put their prices up on renewal. Usually, even their cheapest contract price for renewal would be higher than your current contract price. For this reason, It may be worth for you to shop around for cheaper electricity suppliers available in the market nearer to your contract renewal period.
If the office building belong to your business, is it possible for you to install solar panel so you produce your own electricity and if there is any excess, you can sell it back to electricity companies.
Do not be put off by the changing supplier and paperwork stuff to swift supplier. The amount of time you spent on sorting out the paperwork would save you a chunk of money which you can save it or use it on something else.
The same goes with renting your office space. Can you get an office space for lower rent somewhere else? Take into consideration of your staff travelling to work time. Preferably, your location not going to be resulting in your staff have to pay more for travelling. Otherwise, you either increase their salary or you give travelling allowance or you take the risk that they are willing to absorb the extra travelling time and cost. Just be fair.
Encourage your customers to pay
During recession, people usually hoard on to their money and want to spend less. You may like to offer your customers an attractive discount to make them pay you upfront or early settlement. By doing this, you avoid bad debts. So why not?
Similarly, if you must also be mindful before you increase price with your existing customers. Passing on your increasing business costs to your existing customers may not be a good move. You risk them to swift to other provider whom can offer more affordable products and services similar to yours.
If your existing customers come to you with cash flow issues, help them to pay you. Devise an installment payment plan for them. For instance, say, they owe you £5000. You allow them to pay you in equal installment of £1000 per month and they will settle their invoice on the 5th month. With this, zero bad debts for your business.
Companies House and HMRC
In some cases, Companies House and HMRC allow instalment payments. However, you must write to them with your proposed payment plan and explained why you cannot pay your late filing penalty and/or your company taxes on the due date. Your proposed instalment payment plan would not be automatically approved, Companies House and HMRC will review your proposal and get back to you in writing.
For example, you incur a late filing penalty of £1500 because your company accounts were late for more than 6 months. Ask your accountant to write to Companies House with a proposed instalment plan that what your business can pay. Say you can pay £500 per month, then state that in your proposal. After you settle your late filing penalty invoice, make sure you file your company accounts and confirmation statement on time every time.
Contact our London accountants if you have any questions about your UK company.