Monday 15 December 2008

Selling on credit

Whilst selling on credit is a big subject, one idea to highlight:

It's worth maintaining a good relationship with your customer accounts payable or bought ledger department by telephone to check before invoices are due:
  1. Whether invoices have been received, especially large invoices
  2. Whether they have been passed for payment, or if there are any issues
  3. When payment is scheduled
This can nip problems in the bud earlier, and help compile a more realistic cash flow forecast.

Monday 8 December 2008

Borrowing - the need for forecasts

Banks and similar finance houses will be looking for three key aspects, amongst others:
  1. That repayments can be made out of cash flow
  2. The value of suitable assets, such as debtors, stock, premises, equipment or vehicles
  3. The value of net assets of the business

It's therefore important to compile a cash flow forecast and balance sheet forecast that reconciles to the P&L account forecast.

Monday 1 December 2008

Paying PAYE, VAT and other taxes

When a cash flow forecast for a business is prepared, significant items include PAYE, VAT and other taxes.

The Chancellor announced the "Business Payment Support Service" to potentially allow tax debts to be paid over a longer period of time. Interest is still charged, but late payment surcharges an be avoided.

Details at:
http://www.hmrc.gov.uk/pbr2008/business-payment.htm

Whilst this service could be extremely useful, it should be used with care.