Welcome to our round-up of the latest business and tax news for our clients. Please contact us if you want to talk about how these updates affect you. We are here to support you!
Our office will be closed on Monday 8th May for the bank holiday to celebrate the coronation of His Majesty King Charles. We hope all our clients get the opportunity to enjoy this additional bank holiday. Normal office hours will resume on Tuesday 9th May.Kind regards,
Steve
Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk
Reducing the impact of inflation
The cost of living has surged at its fastest pace in almost 10 years, with consumer prices, as measured by the Consumer Prices Index (CPI), being 10.1% higher in March 2023 than a year before
The increase is primarily due to higher fuel and energy prices but the cost of second-hand cars and eating out also increased, the Office for National Statistics (ONS) have said.
Review your prices
Inflation can significantly affect the profitability of a business as it reduces the purchasing power of both the business and its customers. Inflation will affect the amount you pay for stock, wages and other expenses, so now is a good time to reflect on the prices you charge your customers to ensure you will remain profitable.
Therefore, it's essential for businesses to regularly review their pricing strategy to ensure they remain profitable and keep up with the inflation rate.
Here are a few ideas to help with price reviews:
• Review your Cost of Goods Sold (COGS) regularly to assess the need for price adjustments.
• Consider inflation's impact on COGS and adjust prices accordingly.
• Analyse market trends, competitors' pricing, and customer demand for the optimal pricing strategy.
• Conduct surveys to gauge customer willingness to pay and adjust prices accordingly.
• Experiment with different pricing strategies to improve profitability.
• Communicate price increases transparently and in a timely manner.
• Monitor the impact of price increases and adjust pricing accordingly if necessary.
• Offer promotions, payment plans or discounts to ease the transition for customers to the new pricing structure.
If a business doesn't increase its prices to keep up with inflation and maintain profitability, it may struggle to cover its costs, leading to reduced quality and can put the business's long-term viability in jeopardy.
Please talk to us about planning ahead because we have considerable experience with helping our clients with their strategy and sustainability in turbulent times.
What’s really important?
With the constant news surrounding the economy, interest rate uncertainty, and high inflation, its difficult not to worry about these issues and lose sight of what’s really important – the health and welfare of you and your loved ones.
The issue we all face is a potent mix of inflation, recession, high debts, and the core reason for it all, a wartime energy shock. It is not the market driving the crisis; it is geopolitics, diplomacy, and conflict. On an individual level these events are not within our control, so what can we do to keep rational whilst this crisis unfolds?
It is worth remembering a quote from the singer Celine Dion: “Life imposes things on you that you can’t control, but you still have the choice of how you’re going to live through this”.
Firstly, know that you can only control your life and those close to you. Everything else going on is typically uncontrollable just now, so take time to set some long-term goals to give you a sense of agency and control. Next, List the things that make you happy and safe, by doing this you can focus on the good things and not the other stuff. Thirdly, take time out to do things you enjoy. Doing something you are good at reinforces a sense of self-worth and purpose.
If you own a business, then:
- Take time to review your personal objectives – the business is there to provide you with what you want from life, not the other way round!
- Look at where the business is now: its strengths, weaknesses, opportunities, and threats. This will give you a clear understanding of its position in the marketplace, the competition, the systems, and the way things are done and the improvements that could be made.
- Focus on what the business is to look like when it is “complete” or running profitably and successfully. You can then determine priorities – the big issues that need to be focussed on.
Ask us about our One Page Analyst, a “what if” scenario planner which takes your projected 2023 figures and allows you to work out the effect on profit of reducing expenses, increasing sales, increasing, or decreasing prices.
If you need help during the next few months, please call us – we are here to support you!
Can you create more ‘productive’ time?
For many small business owners, if they have one consistent issue, it would be that there is simply not enough time in the day to achieve all the things that need to be done.
Have you ever got to the end of the day, having worked your “socks off” for the entire day, and asked the question “what on earth have I done today?” If the answer is yes, then the next question is “how many days per week do you get this feeling?”
So, what can you do, in an office environment for example, to free up some time for productive and focussed activities?
Do Not Disturb (DND)!
By far and away the simplest technique to create time is to ensure that you set time aside for you to carry out the tasks on your “To Do List”.
We have all heard managers announce, “I have so much to do; I am working from home tomorrow”. This is an example of putting yourself into a DND mode to allow you to complete tasks that are on your “To Do List”.
Why is this so? - All too often we come into our business premises with a list of tasks that we intend to complete. The telephone rings, customers and suppliers want time, fellow employees come into your office also seeking your time, and emails and correspondence continues to flow onto your desk – Is this a familiar feeling?
If you meet with your team and agree with them that this is the case for many of them, then it makes sense to agree we need to do something about it.
The recommendation is to switch the office into a DND mode for typically 1 to 2 hours every day.
The DND mode includes no external telephone calls coming through to employees, no internal telephone calls, no disturbing employees internally, and a discipline to switch off emails other than for those relevant for the “To Do List” of the individual employee. Many businesses rotate their DND time amongst their employees.
The net result of this is that people get more of a sense of achievement at the end of a day, and this often results in a feeling of satisfaction and far less stress.
Here are some other “time saving” techniques that might work in your business:
- If you have ever found yourself thinking “it is easier to do it myself”, then maybe try and discipline yourself not to do so and delegate (and, if necessary, train) where at all possible. There is a fine line between delegation and abdication – supervision is required when one delegates, and feedback is helpful so you can keep control of the process.
- If you have asked somebody to do something there has to be an assumption that this will done be unless you have been told otherwise. It is a mistake to allow anybody not to tell you if they can’t do something that has been agreed to be done. This may sound obvious, but the research is quite clear; there are too many occasions where things just simply do not get done despite requests, and it can be very time consuming to redeem the position.
- We all receive too many emails and the methodology that may work for some employees is to have emails sent to another supporting source, whose job it is to read all emails with the following three outcomes:
- Delete emails because they are not relevant;
- Forward onto the relevant employee with the words “Please read but no action required”; or
- Forward onto the relevant employee with the words “Please read - action required”.
- The “One touch” only rule – in the ideal world the best efficiencies come from reading an email or letter once and dealing and responding directly to the customer. To have to re-read is generally considered inefficient.
- Don’t laugh, but if you have a chair in or around your desk, people will sit in that chair. If people sit in a chair the discussion will take longer than if they are standing – so, do you want to have a chair for people near your desk?
Business asset finance explained
Business Asset Finance is an agreement that enables businesses to obtain the assets needed to manage and/or expand effectively and spread the cost/outlay.
Regardless of the size of business, the decision to invest in assets is always difficult but take a look at some of the benefits:
- A great alternative to a traditional bank loan;
- Increased tax benefits;
- Payments can be budgeted according to cash flow; and
- Lenders secure against the asset.
- Hire Purchase - allows you to buy an asset and pay for it over a period of time, spreading the cost via an agreement with a finance company. An initial deposit is payable; and
- Finance Leases – a rental agreement through which an asset can be obtained for a fixed term. At the end of the initial term, the agreement can be extended, or sold with a rebate of the sale proceeds to the client.
Bill discounts for energy and trade intensive sectors
Applications have now opened for energy and trade intensive sectors that are most affected by the rise in global energy prices to claim further discounts on their bills between 1 April 2023 and 31 March 2024.
Ceramics and textiles are among the wide range of sectors potentially in line to benefit. These companies use high amounts of energy to deliver their goods, but also are exposed to strong international competition, meaning they cannot raise their prices to cover the increase in costs they have faced.
The offer is part of the government’s new Energy Bills Discount Scheme, launched last month, which will continue to automatically give businesses across the UK money off their energy.
Businesses are advised to, as soon as possible, find out their eligibility and what they need to do to apply. Discounts could be reflected in bills from as soon as June, with support backdated to 1 April. This could save some around 20% on predicted wholesale energy costs.
See: Energy Bills Discount Scheme - GOV.UK (www.gov.uk)
Interest rate increases on the Court Funds Office accounts
In response to the increase in the Bank of England base rate on 23 March 2023, the Lord Chancellor has reviewed the Court Funds Office (CFO) rates of interest payable to clients and from 21 April 2023 these changed to the following:
- Special Account – increased from 4.0% to 4.25%; and
- Basic Account – increased from 3.0% to 3.188%.
See: Interest rate increases on the Court Funds Office special and basic accounts - GOV.UK (www.gov.uk)
Statement from the Confederation of British Industry (CBI) board
The CBI has suspended key activities until June after a number of businesses left the business group following allegations of rape and sexual assault. Many more businesses have announced they are leaving the group or pausing their membership after new allegations about misconduct at the organisation.
The full statement from the CBI board can be seen here: Statement from the CBI board | CBI
First aid at work: the basics
The Health and Safety Executive (HSE) have produced ‘basics for your business' webpages offering health and safety advice, whatever industry you work in.
The basic step-by-step guide on first aid at work explains how you can have the right arrangements, including:
- a first aid kit,
- training workers,
- first aid for homeworkers, and
- appointing first aiders.
See: Health and Safety Made Simple: The basics for your business (hse.gov.uk)
No comments:
Post a Comment