The New Normal
Businesses and not for profit organisations are now beginning to return to working albeit in a different or changed way. In addition to catching up with outstanding work and organising how to go forward, now is a time to refresh your business planning and in particular your financial plans.
Good financial forecasts are even more important now when the future is uncertain and potential future work is in the shadow of Covid-19. We would recommend that at the very least businesses forecast profitability and cashflow for three months in advance. For larger organisations this should be extended to the next year or more, with detailed forecasts for the next three months.
Where do you start?
The key factors we would expect to see being planned for are:
1 Phasing out of furlough support
2 Repaying VAT deferment and any other agreements for delayed payments to HMRC
3 Reinstating capital payments on loans and HP
4 Rebuilding stock to normal levels
5 Slower receipts from customers as they return to normality
6 Longer term liabilities such as CBILS and Bounce Back Loans
7 Re engaging customers
The list is not exhaustive but if organisations cover the above, it is a good start.
Now is a great time to learn lessons from lockdown, what worked and what didn’t should influence your longer term plans and even have an impact on immediate working methods.
What have we learnt?
We have found that those who adopted Cloud based systems have been better placed to survive the lockdown. They have had access to critical information at any time and have been able to access government funding more easily with quicker results.
We would also extend this to say it is not just financial systems but communications, planning and operational systems. Being able to move your business online is a major advantage and one that is difficult to put in place without good planning and often, some sort of investment.
Longer term strategic plans will need to be reviewed particularly if you are an office based business, where home working could have a major impact on your space needs going forward. We anticipate that blended working will be the new normal and that large office spaces will be a thing of the past. Investment will be refocussed from property to IT and Cloud systems, flexibility will replace monolithic business structures, team working will replace top down management.
Collaboration will be key, whether that be with your stakeholders or available applications to improve efficiencies- regardless of how, it is imperative that it is planned for.
Our advice is start planning now and your accountant is a great person help you.
We have fantastic systems and a highly qualified team. We will sit down with you (virtually if you wish) to discuss all the quantifiable aspects of your business and all the factors that could influence your businesses financial future.
Talk to us today about accounting for tomorrow.