As the new tax year approaches, careful financial housekeeping could help you plough back much-needed capital into your business, says Nigel Crunden
The immediate period before the end of the financial year can often become a bottleneck for businesses, as the race to file tax returns and expenses on time accelerates.
For many companies, this is also a pertinent time to review supplier pools and budget plans to identify where savings can be made for the coming year.
Despite consistent reminders and the likelihood of a fine, some business owners still fail to file their corporation tax returns by 31 March – the deadline for submission that many businesses choose.
No matter how experienced you are as a business owner, a hands-on approach to tax issues is always advisable, even where this has been outsourced to a financial adviser.
Last October, HMRC confirmed that the UK 2012-13 tax gap – the difference between tax owed and tax collected – stood at 6.9 per cent or £34bn, a significant loss in inward investment.
Now is also an ideal time to get your schedule of contracts in order for the coming year. Contracts with existing suppliers therefore need to be checked to determine if any reviews or renewals are due, so that businesses can properly plan for these.
Budgeting should be a core focus throughout the year, but again, now is the time to really drill down into a comprehensive audit of what is being spent and where. It is only by doing this that unnecessary costs or a need to consolidate suppliers can be properly identified.
As you look at your budgets for the year ahead, determine whether fewer suppliers could provide multiple categories of products and services. By establishing a small, core set of suppliers that service multiple needs, greater control is retained and costs are significantly reduced.
The need to maintain a competitive edge has never been more important, and lean, efficient operations are at the heart of this.
This time of year shouldn’t be an administrative hurdle, but instead an opportunity to claw back costs and plough much-needed capital back into the business.