As the ringing tills of the festive period become an increasingly distant memory, it is crucial that licensed trade operators take proactive steps to maximise trading and preserve cash through the coming weeks, writes chartered accountant Alistair McAlinden.
During the traditionally slower trading months, it is vital that your business is in a position to meet the demands of the post-festive season – not least of which being larger than usual supplier and tax bills. Furthermore, with the introduction of the national living wage pending, a productive and efficient start to the year is arguably more important than ever before.
To ensure operators are better-placed to thrive during the post-festive slow-down, and to make each business more resilient and responsive to any decline in trade, consider the following:
· How closely do you liaise with your key suppliers? Any anticipated difficulty in paying bills should be discussed at the earliest possible opportunity. Inaction – or perceived inaction – could harm future relations with key suppliers.
· Are you able to quickly produce accurate and up-to-date financial information for your business? Lenders and suppliers are more likely to consider providing financial support if you can clearly show when and how you anticipate any cashflow difficulties reversing.
· What is the phasing of your VAT quarters? By obtaining HMRC agreement to move from a December 31 to a November 30 quarter end date, operators could defer payment of December’s VAT liability until early April, which could help cashflow.
• What is the phasing of your rental payments? Could proactive landlord discussions allow quarterly payment dates to be moved to avoid times when cash availability is at its lowest?
• Have you properly considered the tax implications of any property or equipment acquisitions or refurbishment works at your premises? A historical review of property, equipment and refurbishment expenditure, helps ensure that applicable tax reliefs are maximised and could result in certain reliefs becoming available sooner than anticipated.
• Against the backdrop of the recent devolution of business rate-setting powers to local authorities, when was the last time you instructed a rates review of your premises? There are various specialist agents who offer this niche service, which could result in identification of future savings and the possibility of recovery of historical overpayments.
• What can you do to attract customers and encourage them to spend money during a traditional period of austerity?
Whilst not intended to be an exhaustive list, by considering at least some of these points, actions taken now to banish the post-festive blues could lead to a more prosperous 2016 and beyond.
• Alistair McAlinden is head of Hospitality & Leisure within the KPMG Scottish Restructuring Team.