Category: Blog

For over 26 years, Stephens Accountants have been supporting business owners with our accounting knowledge, expertise and first-class service. We care about our clients and have helped over 1800 people across 32 industries.

Our All-Inclusive Accounting plans allow your business to outsource this side of your business to our team of financial professionals. Our plans are inclusive of everything that your business needs from an accountancy perspective. From Online Bookkeeping, Payroll, VAT, as well as your year-end returns, including management accounts, you can rest easy knowing that all your company’s financial affairs will be in order and fully compliant.

Plans start from as little as £59.00 PW, which is less than the cost of a bookkeeper for 1/2 a day. Our service is perfect for small to medium businesses and allows you to focus on what you do best: running your business and it’s more affordable than hiring an in-house accountant. As part of our all-inclusive service, you will be allocated a responsive account manager dedicated to you and your business.

What’s Included:

• Cloud bookkeeping to digitise your accounting software
• Full training and support to help you process your sales, bank feeds and VAT returns.
• Payroll processing for weekly or monthly payments
• Management accounts report meeting every six months
• Annual statutory accounts report to discuss tax savings and future plans for the business
• Debtor control: managing payment and keeping cash flowing.

If you’re not completely satisfied with your current accountants, don’t let the thought of switching firms deter you from getting a first-class service. With our Easy Switch Service, we communicate with your existing accountants on your behalf to transfer all the information required and can complete the switch in as little as 48 hours.

If you’d like to discuss our All-Inclusive Accounting packages, please email us directly at info@stephensaccountants.co.uk or call 01977 791757.

For any business to be successful, it needs the ability to grow. However, growth requires investment, and paying cash upfront for new equipment, machinery, and vehicles can be expensive, risky, and lead to cash flow issues.

What can you do to ensure cashflow problems don’t arise?

Waiting until you’re in a position to pay for what you need can be an option; however, if your business needs it, it needs it now. Asset finance can help you to achieve your goals quicker and more efficiently.

Asset finance accounts for the majority of debt finance undertaken by businesses in the UK. Around 1 in 3 small businesses that have any external borrowing use asset finance as it is a great way of releasing cash tied up within the business or extending the cash life cycle. With any asset finance deal, there are two routes you can take: Hire Purchase (HP) or Lease Finance.

Deciding which agreement is right for you depends on what you are financing and the length of time you want the finance for.

But what’s the difference between Hire Purchase and Lease Finance?

We’ve listed some main points below to help you in your decision.

Hire Purchase:

• Hire purchase gives full ownership of the asset at the end of the agreement.
• Structured repayment periods to suit your cash flow.
• Fixed monthly payments available to help with budgeting or variable rates if preferred.
• Tax advantageous as VAT is usually reclaimable, and repayment interest can be offset against profit.

Lease Finance:

• Allows full use of the asset but without ownership; rentals are paid over the term of the agreement.
• Low initial costs so you can start earning from the assets immediately.
• Rentals can be tailored to your cash flow.
• Fixed interest to avoid changes in the base rate or variable interest if preferred.
• VAT is only payable on the rental, not the purchase price.
• Can be tax advantageous; you could ask your accountant!

So, what does it really mean? With Hire Purchase, you’ll own the asset outright once your contract ends, with no more payments to make. Asset Finance could also be an option at this stage.

In a Lease Agreement, at the end of the primary period, you can continue to hire the equipment or arrange to sell it.

We work with you to get the best deal. Contact us today if you need help deciding whether you should have a hire purchase agreement or a lease agreement.

You asked, and we answered. Here’s a quick look-through of most SME businesses’ questions about cash flow management.​

1. How to Plan Finances for the Future?

This one’s a tough cookie to crack but believe me, it’s the answer to all your cash flow management woes. For starters, if you still need to update and record your accounts clearly and accurately, do that now. You can use your monthly income and expenditure details and past cash flow records to determine how much you will spend or earn in the coming months.

2. How to Keep the Cash Growing?

A straightforward way to do it is through putting money in interest-earning accounts. If you have to withdraw funds, for example, in the case of payroll, do it just before payment.

3. How to Deal with Difficult Customers?

In the service business, the customer is king, but certain customers can spell a lot of trouble for small business owners when it comes to cash flow management. Payment is one thing SME businesses face a lot of trouble with customers – the best thing to do is set a payment policy on receipt of invoices. Don’t wait for the end of the month to receive payment, and follow up with late payers through timely letters and, when all else, phone calls.

4. How to Keep Your Vendors Happy?

It’s only sometimes possible for an SME business to make early payments to vendors and stay on schedule. However, not doing so can hurt your reputation and result in a poor credit rating. Set up payment cycles and keep up with the terms regularly to avoid any issues in cash flow management.

5. How can a Small Business Maximise the Cash Inflow?

Several creative ways exist to increase your cash inflow without incurring a profit loss. It’s all about intelligent strategy, cash flow management and careful planning in advance.

Ask for security deposits. This works if you are offering a product or service that is particularly large, expensive or one-of-a-kind, made on order. With security deposits, you will likely avoid a loss if the customer decides to walk away and have cash in advance before you start working.

Another rule to have is a strict payment schedule. Stick to it and charge extra fees for late payments or modifications after deadlines.

6. What is the Best Way to Get Payment for a Small Business?

Consider a subscription-based model for pre-payment. This works if you offer a regular service, and the advantage is that you have a secure cash pool for future costs and resource scheduling. You can also add a credit card payment option. This means more convenience to the user and more timely and reliable payments with a regular schedule. Increase the price to make up for the extra charges, and offer discounts to cash-paying customers to sweeten the pot for them.

7. How to Reduce Small Business Expenditure?

There is no specific answer to this – different businesses can employ various strategies to limit their cash outflow. Here are a few ideas:

• Consider leasing or choosing used goods instead of new ones when buying equipment.
• Get into the habit of regular maintenance and repairs instead of replacement.
• Consider open-source software and limit upgrades. Unless necessary, work with open-source software that doesn’t need frequent promotions.
• Outsource what can’t be done in-house. Instead of hiring permanent employees and spending on salaries as well as training, try outsourcing a number of tasks, such as website management or social media marketing, to save money.

To find out more about how we can help or to get your questions answered, call us on 01977 791757 or email info@stephensaccountants.co.uk

Do you find that your business is booming at certain times of the year compared to other times when it’s slower?

For example, a business selling ice creams will make more money in the summer when people want to sit out in the sun and enjoy something cold rather than in the winter when it gets darker earlier and they want to stay indoors. The same can be said for businesses that make more money in the winter months with Christmas sales compared to the summer.

As a business owner, you will know that if you have taken out finance, there are some months when you’re making the repayments that you find yourself thinking, “I have extra money this month, but in 2 months, will I have enough money for my repayments?” This can be an annoying position to be in.

But what if there was a simple solution to your problem? Well, there is.

Seasonal Payments!

Seasonal payments allow you to tailor your finance repayments so that your prices are higher when you are making more money than when you make less; the amounts are smaller.

This allows you to keep control of your cash flow and plan. As much as we like to think we’d put the money aside and save, other things that end up using the money crop up. This way, you’re still paying the same amount overall but are spreading the cost to suit your business.

This is great for all businesses, especially those in tourism, agriculture, hospitality and outdoor sports, which tend to have peak and off-season times. These payments allow for a more flexible way of business finance.

We always want solutions that help you and your business grow and not cripple the bank account.

If you are looking at getting finance for your business, speak to us about seasonal payments and see how they can help in your off-peak times.

The rise in the number of lenders in the marketplace and the ability of business owners to get finance with almost the click of a button has both a positive and a negative impact.

Whilst these businesses are raising finance to support their business, there is often a worry that they are using loan payments in the place of increasing sales or controlling escalating costs.

Over the last few months, we have seen a few businesses that have taken out numerous loans from various places without taking advice; in some cases, they have been subjected to daily payments at astronomical rates.

Whilst we are not disputing that there is a need for these lenders, we highlight that with a more precise, thought-out plan, these businesses could structure the loans much more cost-effectively, saving money both in the short and long term. But more importantly, they are not potentially cutting themselves off from more lending opportunities in the future.

If this is you or someone that you know, then there is a potential solution: Debt Consolidation.

Debt consolidation is an effective way for businesses to restructure existing, expensive business debt from lenders, corporate credit cards, creditors, suppliers or collection agencies.

It’s a process whereby a single, larger loan is taken out to pay off multiple smaller debts. This can be through secured borrowing against an asset, such as a property, or further unsecured borrowing.

It’s easy to get into financial difficulty if you have too many credit commitments to keep track of each month or because cashflow problems or sudden unexpected expenses mean you cannot keep up repayments on short-term, high-interest debts.

The main benefit of debt consolidation is that it allows the borrower to improve the liquidity or cash flow of their business, and it can also reduce administration costs, especially if the company has multiple creditors to service each month.

The benefits of debt consolidation

Potential savings: If your new borrowing rate is lower than your original rates, you can reduce the overall amount you have to pay back. Repaying over a longer period could also bring your monthly payments down.

Reduced admin: Deb consolidation will reduce your administration if you have several debts spread across different lenders. You’ll only have one creditor to work with, rather than juggling the repayments for multiple sources of business finance, like credit cards and invoice factoring. By bringing them into one place, you can free up time you’d otherwise spend dealing with creditor calls and emails and reduce your admin costs.

Greater efficiency: Your debt will be in one place, so you can easily track your finances.

Clearer budget: One monthly repayment should make it easier to stick to a monthly budget.

Potential to boost your credit score: Streamlining your bills should reduce your chances of missing a repayment and, therefore, positively affect your credit score.

Flexibility: Fixed repayments or flexible payments to allow for seasonal fluctuations

Getting the right advice

One word of caution. Leading debt charity the Debt Advice Foundation warns that debt consolidation might only be the solution for some depending, for example, on your credit rating and other factors. So, getting the right advice is imperative before proceeding along this route.

A commercial finance broker will help you to compare all the options so that you only jump straight in with another loan once you are 100 per cent happy you’ve found the right one. Your broker will have access to a wide range of alternative finance providers, so you don’t have to rely on the high street banks.