2018 saw that 70% of UK start-ups scaled up quickly and 29% ran out of cash within their first year. Late payment of invoices, slow financial turnover and unforeseen outgoings can have a detrimental effect on a business. However, there are many ways in which to uncover monies within a business and locate cash previously not recognised. Here, we worked with the team at F-Initiatives to present 5 ways to obtain secret cash in your business.
R&D Tax Relief
Depending on your business’s eligibility, R&D tax relief can award you with tax credits, a reduction in corporation tax and even cash back to the company’s accounts.
Manufacturers who have created a new and innovative product can claim for a share of the research and development that went into creation process. If your business does not fall into the manufacturing realm you can still submit an R&D tax claim.
If you your business has created a process that is prescriptive to the business and aids in the smooth running of operations, then eligibility will also be considered.
Lease Potential Big Purchases
Even small start ups require products that are considered big purchases. It is worth remembering that buying products are final and there is no flexibility once they are in your business’ possession.
Leasing potential purchases such as cars provides ease when submitting your annual tax claim. It also demolishes the burden rapidly losing its value as time goes on. However, always risk asses the decision with the terms and conditions presented within the lease. If you know that you will exceed mileage conditions etc, then outright purchases can serve as the better option.
Outsource Tasks to the Experts
Sporadic tasks that require an expert is inevitable. However, many companies cannot afford to employ a full time or part time member of staff. Directors can also be fearful that if the tasks were made into a specific job role, the work load may not align with the financial return.
Outsourcing tasks to experts within their field allows you to only outlay costs as and when you need specific tasks completed. Not only is outsourcing cost effective but frees up time for full time members of staff. Budgeting quarterly for such tasks allows you to avoid any unsuspected financial outgoings.
An ongoing conversation
An agreement with suppliers doesn’t have to be written in ink. If you hit financial strain, always instigate a renegotiation. Renegotiating rates initially agreed is a great way to ‘free up’ some cash.
Always request a monthly report from suppliers so that you are working with full transparency. Monthly reporting also presents the opportunity for you to asses if your payment aligns with the work being done and serves as an asset in negotiation.
Some subscriptions are very low in cost. So much so that you may not even notice them leaving your company account. Ensure that you thoroughly go through your company’s bank statements every month and cancel any subscriptions that you may not be using.