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Planning for change
Recent months have seen significant changes to the UK’s economic landscape. While the exact impact of Brexit remains
to be seen, change is an inevitable part of business and it’s essential to be able to adapt to whatever may be around
the corner.
All businesses are subject to change,
whether this is due to internal factors such
as launching a new product, or external
factors, including the emergence of new
technologies or competitors.
Planning ahead
Forward planning is key to managing
change. You will need to work to identify
where changes need to be made, and allow
sufficient time to test any plans. Now is
the time to review your short, medium and
long-term objectives in line with the ‘SWOT’
principles – identifying any strengths,
weaknesses, opportunities and threats.
Action points
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Review and update your business plan
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Plan for where you see your business in
one, two and five years’ time
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Look at what your competitors are doing
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Set up key performance indicators (e.g.
sales, staffing)
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Draw up a specific timetable for action
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Measure your performance against your
targets
Responding to change
Change brings with it both challenges and
opportunities. It may be that your business
needs to reconsider its existing offering,
whether this means modifying products or
services or approaching entirely different
markets. You may also wish to consider
partnering with another business.
Action points
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Consider adapting or expanding your
existing offering
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Research and test potential new markets
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Consider adopting new sales and
marketing techniques, including online
and social media channels
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Consider the impact on staffing levels and
processes
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Focus on the most profitable areas of
your business
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Seek customer feedback on your
proposed changes
Creating a positive
culture
People can be resistant to change. However,
you can help to foster a positive attitude
to change throughout your business, by
explaining the need for any changes.
Action points
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Engage staff by inviting ideas
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Hold regular brainstorming sessions
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Nominate a key member of staff to
coordinate the changes
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Consider the retraining needs of existing
staff
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Establish a clear timetable for the changes
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Offer an open door policy
Protecting profitability
Change could potentially affect any area
of your business but there are a number
of steps you can take to help protect
profitability.
You may look to introduce strategies for
increasing turnover. Working to increase
sales to existing customers can be one
of the most effective ways to boost the
bottom line.
Action points
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Look to reduce costs, such as utility bills
and bank charges
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Negotiate with your suppliers
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Cross-sell and upsell to existing
customers
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Consider whether you are making the
most of your employees
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Ensure systems and processes are as
efficient as possible
Managing cashflow
It may be that you will need to borrow
additional funds, in which case you may wish
to delay any planned investments. We can
provide regular cashflow forecasts to help
with your budgeting needs.
Action points
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Consider the optimum time for purchases
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Negotiate payment terms with customers
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Invoice as soon as possible
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Operate stringent credit control
procedures, including credit checks
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Revisit your pricing structure
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Ensure effective stock control measures
are in place
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Consider the funding options available
Careful planning will help you to
effectively manage change. We
can help with your business and
financial planning needs.
Making Tax Digital: government outlines new rules
In response to the feedback it received from businesses
and industry, the government has outlined a raft of
proposals in relation to its new Making Tax Digital (MTD)
initiative. Many of these relate to the Making Tax Digital
for Business (MTDfB) scheme.
Free software will be provided to businesses with the ‘most
straightforward’ tax affairs, and firms will also be permitted to
use spreadsheets for their record-keeping. However, these must
meet the relevant requirements of MTDfB. Charities (but not
their trading subsidiaries) will be exempted from the need to keep
records digitally.
MTDfB will be deferred until 2020 for partnerships with turnover
exceeding £10 million, while the cash basis entry threshold for
unincorporated businesses has increased to £150,000 and the
exit threshold to £300,000.
Taxpayers will be given at least 12 months to familiarise
themselves with the new quarterly reporting changes before any
late submission penalties are applied.
Further changes were also unveiled in the 2017 Spring Budget,
including a one year deferral from the mandating of MTDfB for
unincorporated businesses and landlords with turnovers below
the VAT registration threshold (£85,000 from 1 April 2017). They
will now be required to start using the new digital service from
April 2019.
Please note that following Theresa May’s decision to call a snap
General Election on 8 June, the government removed legislation
to implement MTD from the Finance Bill 2017. The clauses are
likely to be reinstated after the election.
As your accountants, we will continue to assist you with
your tax affairs, and will be keeping you up-to-date with
the latest MTD developments.