The cost of living in the UK has been rising for well over a year and it shows no signs of stopping. Along with households, Business Owners are now also having to consider careful budgeting to ensure they can get through the next few months - or years - of potential financial hardship.
What is the crisis all about?
In a nutshell, the current cost of living crisis boils down to inflation. Inflation happens when the cost of 'living' (such as food shopping and other essential household goods like energy) rises faster than the average wage people are paid. Since Businesses spent many months closed down during the pandemic, if they survived the closure many needed to put prices up to ensure they could continue, despite receiving grants and loans from the government - for some Businesses, these would not have been enough to help them recover.
Add to this many global factors such as the war in Ukraine, supply chain and logistics issues, plus the fact that the UK has been reported to be one of the worst affected countries globally (of the advanced economies); then it looks like we are in for a bumpy ride for many months to come yet.
How might it affect my business?
Many Small Business Owners will already be noticing the impact of the rising costs in your business. From heating and other energy bills, staffing costs such as uniform/wages/cost of fuel for company cars or mileage claims, to cost of supplies such as stationery, office equipment or goods that your business may sell.
There is another impact that people don't think about, and that is the mental wellbeing of your staff and colleagues - as well as your own. The burden of this crisis will affect those who are lower earners the hardest, so remember that as much stress as you are dealing with as a Business Owner, your staff and colleagues will also be dealing with their own stresses of financial burden at home.
How can I prepare and cut costs?
There are many reasons why Accounting is important for your Business, and here at Hubu Accountants we're happy to help you understand the key things you need to look out for and focus on for your individual circumstance.
Aside from the obvious things, (you know that shiny new Mac book computer you've been eyeing up? Well don't buy it yet); there are other small things you can do to prepare and stay ahead of the game during this cost of living crisis:
1 - Keep abreast of important accounting dates - get them in your diary so you don't get any last minute surprises!
2 - If you haven't already, then find an accountant to help you with your budget - learn more here about the Importance of bookkeeping in Business.
3 - You can also check out the best accounting software for your Business - by April 2023 all self employed people will have to adhere to the new Making Tax Digital rules (MTD) that the government have put in place - meaning you'll need to be running your business online. This is a great way to help you to be disciplined when it comes to sticking to your budgeting plans, and keeping an eye on your P&L - therefore keeping on top of cash flow. But why wait until April when you can start looking at Digital Bookkeeping now?!
4 - Talk to Hubu Accountants to find out how our accounting expertise could help you to save time, frustration and most importantly - money. Call us on 0800 206 2625 or email us at info@hubu.wales today.