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Is your business ready for 2021? Get set for the year ahead with forecasting, budgeting and effective cash flow management

Businesses have faced a number of unexpected challenges over the past year, with the coronavirus pandemic having an unprecedented impact on our lives. With England now in national lockdown once again, it’s more important than ever to ensure that your business is ready for 2021.

To ensure that you are set for the year ahead and the challenges it may bring, there are several key factors to consider, including budgeting, forecasting, cash flow, management accounts and business planning, which can all help through lockdown and in the longer term, help achieve your goals.

Budgeting

Budgeting is one of the key components of any business and it is essential that you monitor monthly incomings and outgoings to provide a solid foundation for your business.

Typical outgoings include rent, taxes, vehicles, daily expenses, emergencies & repairs, energy and utility bills, insurance, payroll, marketing & advertising costs, plus any one-off expenses, planned investments, upgrades and professional fees.

Cash flow

Having either less money coming in and more money going out, or a chaotic cash flow is one of the most frequent factors in business insolvency. 

Recent research has even revealed that late payment of invoices is the cause of one in five company insolvencies, and during a particularly challenging economic period, it is more important than ever to ensure that you are managing your cash flow effectively.

Despite larger companies being the sole cause of cash flow problems among the small and medium-sized enterprise (SME) community, how they conduct business is out of your control. This is why SMEs need to think efficiently about business decisions, such as who you do business with.

Obtaining a contract with a larger company, who has a reputation for late payments, may not be the optimum use of your resources. It may instead be more prudent to consider acquiring several contracts with reputable contacts.

These will be smaller individual contracts, but importantly, the risk is spread and this also enables the development of more business relationships to ensure a good, consistent flow of cash.

Forecasting and management accounts

Forecasting for the unexpected, such as the events of 2020, is an essential step that an adviser can help you with, as the forecast will need to be as accurate and comprehensive as possible to create a precise cashflow model.

Successful businesses are only as strong as their strategies, which is why monthly management accounts should be a key consideration for any business.

By providing your business with a detailed breakdown of exactly how you are performing, management accounts allow you to set targets, foresee potential problems and shape your ideal business strategy, particularly in a changing business environment.

Outsourced Finance Director

We know that the time involved in running a finance department can be a significant cost for a business, with elements of the finance function requiring a significant level of expertise to ensure that it operates efficiently and effectively.

For some businesses, this may be an overhead that is simply not in line with their operating and trading levels and this is where our expert team at Seymour Taylor can help.

We can provide your business with the services of an experienced Finance Director through our Outsourced Finance Director service, available for the amount of time that you require.

After an initial meeting, we tailor our services to your needs, whether you are an established business or a new start-up, analysing your monthly figures to help you respond to the market conditions and fine-tune your business to help you achieve your objectives.

Management accounts are like a monthly “health check” for businesses – and the information they provide is crucial for keeping on top of cash flow. A strong set of management accounts should include all types of information, such as:

  • Profit and loss reporting
  • Balance sheets
  • Cash flow statements

Management accounting enables cost transparency, flexibility and freedom, helping you to stay on track and achieve your business goals. By outsourcing this service to us, it releases your accounting team’s time and allows you to gain the benefits from management accounting without the burden of preparing them.

How can Seymour Taylor help me and my business?

At Seymour Taylor, we offer a range of services to assist your business and ensure that you are set for 2021.

From our Outsourced Finance Director services to letting us run a strategy and planning session for you, we are here to help.

Our Outsourced Accounting Services team can work with you on areas such as cash flow and cloud accounting, while our highly experienced team of accountants, tax and business advisers can assist you with all of your accountancy and advisory needs.

Our expert team will work closely with you to understand and meet your requirements and to help you develop a programme that fits your needs throughout the year.

For help and advice, book a FREE consultation with our expert team at Seymour Taylor today – get in touch with us via email or on 01494 552100.

This blog is for guidance only, professional advice should be obtained before acting on any information contained herein. Published 7th January 2021.