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Accounting for COVID-19 – talking points

Business Control’s Richard Starkey considers a few of the latest financial developments and offers his thoughts on how to prepare your business for the future.

 

Small business grant confusion

A couple of weeks ago, the government announced that it would be providing small business grant funding of £10,000 for all businesses in receipt of small business rate relief or rural rate relief. It’s a generous grant – and one that’s been very underrated – but there’s little to no explanation of how you get it. And many of our clients need it right now.

  

The official line is to do nothing and that your local authority will be in touch with your money, but I’m not sure this is the best course of action. It also appears that most councils have opened an online application form, so it’s worth looking into this. In addition: check your bank account! It may well be that you’ll receive the money out of the blue!

 

Are you claiming ethically?

The flipside for any accountant that encourages clients to make sure that they claim for every due allowance, is to discourage any claims that aren’t strictly ethical. There are more than a few businesses out there that will have naturally reached the end of their viability and you have to wonder if it’s right that they are now applying for grants, loans and funding.

 

Revamped business loans

The banks have come in for plenty of criticism recently because they made it just too difficult for businesses to access the government’s emergency loans scheme. The Treasury said it had received more than 130,000 loan enquires from firms but fewer than 1,000 had been approved – and it seemed that the banks were being deliberately obstructive or over-demanding.

 

Changes to the business interruption loan scheme will mean more businesses are able to access financial support during the lockdown. Previously, these loans were only available to firms that had been turned down for a commercial loan from their bank. But this is now no longer the case. Also, banks will also be banned from asking company owners to guarantee loans with their own savings or property when borrowing up to £250,000.

 

I’m looking forward to seeing how this changes things for business owners. We’ve had clients who’ve tried to secure a loan but have been asked to provide a business plan and prove that their business will still be viable in the future – but how can any company do that in this current climate? It’s time for the banks to do their bit.

 

As a final point on this subject, I should point out that, of course, these are still loans. And no matter how easy it is to secure this money; it will have to be paid back.

 

A final thought

There’s no doubt about it, these are testing times for many businesses. There’s a creeping realisation that this lockdown isn’t going to last just three weeks and company owners need to be very cautious of their outgoings as well as their income if they are to survive.

 

All our clients use cloud accounting and these platforms are excellent for keeping a close eye on your financial situation. Use them. Get acquainted with the figures that power your business and you’ll be better equipped to handle the coming months.

 

Don’t forget to check out the rest of our Accounting for COVID-19 blogs here, and please check back periodically to get the very latest insight and information from the Business Control team.

 

Better still, you can access a whole host of resources for business owners including blogs, smart guides and infographics for free. Simply opt in here

 

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