Financial planning for reopening crucial, writes Wylie & Bisset partner Catherine Livingstone
WITH pubs, restaurants and cafes set to welcome back customers, now is the time for the hospitality industry to prepare for the long-awaited bumper summer season ahead.
The easing of lockdown measures means that up to six people from six households will be able to meet up for a pint in an outdoor area from 26th April. And restaurants, pubs and cafes can welcome people indoors for a meal and non-alcoholic drink, provided they close at 8pm.
The scheduled reopening follows the much-needed good news that the current non-domestic rates ‘holiday’ for hospitality and tourism businesses is to be extended until April 2022.
And with a large question mark casting doubt about the possibility of foreign travel this summer leading many commentators to forecast a boom in staycations, the outlook for Scottish food and drink businesses this summer is far sunnier than it has been for some time as millions of us are desperate to get back out socialising with friends and family in pubs, bars and restaurants.
That makes now a prime time for operators to give some thought to preparing for the grand reopening.
Do you, for example, have the best accounting system in place? If you have been operating a desktop or manual-based accounting system, now might be the time to consider switching to a digital cloud accounting system, such as Xero. Providing real-time insight into an operation’s financial figures, with live data hosted in the cloud, Xero gives operators access to their cash flows, transactions and account details from any location at any time with all bank transactions imported and coded automatically. Many digital technologies and apps are significantly slicker and easier to use than the old fashioned manual ways of doing things, whether paper or spreadsheet.
The adoption of digital technologies for various business admin functions enables processes and procedures to be undertaken far quicker and far more efficiently than previously and the knock-on effect is huge efficiencies for businesses and a lot less wasted time.
Hospitality sector operators should also take steps to ensure that they are receiving the best financial advice prior to reopening. Do you have the budget required to reopen? Do you have cashflow projections in place to make sure you are able to buy in the stock needed to meet the short-term demand that is forecast?
It is also worth taking time to consider the longer-term goals in terms of building up cash reserves to pay for any liabilities that may have accrued throughout lockdown with regard to bounce back loans and VAT deferment.
Rather than leaving it till the last minute before putting your finances in order, I would advise licensees to plan now, have budgets and cash flow forecasts in place to plan for any liabilities accrued during lockdown to be met and that they are in receipt of the best possible financial advice to help them thrive over the busy summer months ahead.
- Catherine Livingstone is a partner and head of the business advisory services team at Wylie & Bisset