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Simple Steps to Surviving the Credit Crunch

London, UK (20/09/2008)

As the economy squeezes, many local businesses will find themselves under threat.

Mike Simpson of The Local Bookkeeper has some simple hints and tips to help business owners take control of their finances. “The media hype surrounding the credit crunch is certainly starting to translate into cash flow problems for many businesses,” explains Mike. “Many of our local clients are already noticing that customers are slower to pay their bills and that they need to keep tighter control on their costs to avoid haemorrhaging money.” “Businesses need to know what is happening with their finances on a day-to-day basis, not just at the end of year when the accounts come back from the accountant. A clear understanding of how profit and losses are being made, and in particular where money is being wasted, can make the difference between success and failure.”
Many business owners are unaware of the benefits of having a bookkeeper and accountant, not only does it give you the benefit of knowing what is happening throughout the year but also providing your accountant with the accounts already prepared to compute the taxation, therefore potentially saving you money. Ask any business owner which part of their business they least enjoy and most will tell you it is keeping the books in order. Many people don’t realise how cost effective it is to get expert help to clear the paperwork mountain and free up their time for more lucrative pursuits, also allowing immediate access to information about recent business’s performance making decisions a lot easier as they are based on facts.
Mike recommends following the simple steps that are helping her clients to weather the financial storms and make sure their businesses are in the best possible shape as times toughen: Don’t panic! No matter how bad the situation may seem, there will be ways to make it better. Take a deep breath and pick up the phone… Call in the Experts It is vital that you get someone who is properly trained and trustworthy to help you sort things out.
Look for a bookkeeper that is accredited by the Institute of Certified Bookkeepers, that way you can be sure your finances are in the hands of someone reliable. Ask for an initial consultation, which should be free, and the bookkeeper will be able to tell you how they can most help for the least cost.
Order! Order! You can do your bit by making sure you keep records of everything. Always get a receipt for payments; always keep copies of invoices sent out; always keep a note of which job purchases were for. Even keeping everything together in a shoebox is better than not being able to keep track of your money at all!
Don’t Fear the Tax Man “What I am about to say may shock you!” says Mike, “The VAT Man and the Tax Man are just people. They aren’t out to GET YOU!” No matter how much of a muddle your books are in, just as long as they can see you are trying to sort things out, they will help you as much as possible. The worst thing you can do is to bury your head in the sand and hope it will all go away.” “Don’t worry about making that scary phone call to HM Revenue and Customs though,” says Mike, “Your friendly bookkeeper can talk to them for you.”
No More Mr Nice Guy Bad debt is the bane of every business. Slow payers tie up your money and stop you investing it in your own success. “It can be very difficult to chase customers for payment,” says Mike, “Especially when you are a local business and you have good relationships with people you work for. However, you do need to toughen up and ask for your money when it is owed. Better still, get your bookkeeper to chase payment for you!” And Breathe…. Once the muddle is sorted out, you will probably just need a few hours a month of your bookkeepers’ time to keep everything in order, so you can get on with the business of making money. “Taking control of your business’s finances can seem scary”, says Mike, “But expert help can make a world of difference. You really don’t have to struggle on alone.”

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