Category: Business cash flow

Cash flow issues for SMEs and corporate businesses

Get out of business debt

Escape business debt with a Company Voluntary Arrangement

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Once a business starts to experience cash flow problems debts can quickly become unmanageable, even if sales are good and ‘on paper’ the business is thriving. It only takes one credit customer or supplier who doesn’t pay on time, though, and your ability to pay your own debts is restricted.

This knock-on effect within a supply chain or industry can be very damaging, and is sometimes a precursor to full insolvency. It’s also a difficult situation to manage as a director, and a problem that might only be resolved with professional help.

We’re fortunate in the UK to have various procedures available in these circumstances, and one of these is the Company Voluntary Arrangement, or CVA.… Read more

Business debt

How to deal with serious debt as a UK limited company

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When a limited company is in financial difficulty, directors aren’t usually personally liable for the business’ debts. That’s because limited companies are separate legal entities, unlike sole traders, who can be pursued for payment through the courts.

Nonetheless, it’s a difficult situation when a company struggles financially, and if you’re a limited company director it’s important to understand your duties and obligations.

If the company is formally insolvent, you’re legally obliged to stop trading and prevent any unnecessary financial losses for your creditors.

If you don’t do this you could face allegations of wrongful trading, and potentially be held liable for business debts.… Read more

Getting behind with tax payments

Tax debt? How a Time to Pay Arrangement can help your business survive

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If your business has fallen behind with tax payments, there’s a procedure in the UK that could help you get back on track. HMRC’s Time to Pay arrangement, or TTP, is an extremely useful fallback when you’re dealing with short-term financial difficulties.

HMRC take stringent measures against businesses they believe are deliberately avoiding payment, so it’s important to contact them quickly to explain your situation and demonstrate your resolve in paying the arrears.

So what exactly is a Time to Pay arrangement, and how does it work in practice?

What is a Time to Pay arrangement?

HMRC tax payments

A Time to Pay arrangement is a payment plan that reschedules your unpaid liabilities to HMRC.… Read more

Paid on time

How to Get Your Small Business Invoices Paid on Time

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If you want to get paid on time as a small business accurate invoicing is an important element, but other factors also play a part. Presenting invoices that are easy to read and understand, clearly laying out your terms of trade, also limits the opportunity for customers to delay payment via contrived disputes.

So what aspects of invoicing do you need to focus on to get paid on time?

Due date for payment

To some extent, the industry you operate in dictates when you’ll get paid. Construction, for example, is renowned for its lengthy payment cycles largely due to the number of businesses in the supply chains, and the ‘retention money’ system that’s used.… Read more

Small business debt

Sole Trader Debt: 5 Effective Solutions

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It can be difficult to escape sole trader debt, as you’re personally liable for the debts of your business and don’t enjoy the limited liability that’s available to company directors. This means your assets, including your home, are at risk if you’re unable to pay suppliers, tax liabilities, or staff.

Your personal credit rating is also affected when you get into business debt. This can severely limit future borrowing as any defaults or formal debt procedures that you enter remain on your credit file for six years.

Escaping sole trader debt

You can escape serious debt in various ways as a sole trader.… Read more