VAT Paid up to date
PAYE paid up to date
£s Increase in Bank
Payment due day reduced
Our clients, a couple who have a great business based in Paignton with a turnover of £360,000 and growing, needed a new accountant and were referred to us by a business coach because they needed help. They were very worried about their finances; they were up to their £15,000 overdraft limit and couldn’t pay the VAT and PAYE and needed help to get better cashflow. Things seemed out of control and the stress this gave them led them to believe that selling the business was the way out.
At our initial meeting we found they were desperate for help, they weren’t getting any support from their existing accountants. They had no accounting system in place to help control the finances, no system of control of amounts due from customers, they were behind in billing work they had done and their VAT scheme was also hurting their cashflow.
To help them get better cashflow, big changes were made; this included changing the VAT scheme so they weren’t paying VAT on customer invoices that hadn’t been paid. They were shown how to use Xero accounting software to send out sales invoices quickly and keep track of amounts owed by customers and how to bill for work done promptly.
With intensive support from over the first three months, including daily contact, they managed to turn the bank account around from a £15,000 overdraft to a positive £31,000, with VAT and PAYE paid up. Work not invoiced and amounts tied up in unpaid customer invoices reduced from 91 days worth of sales to 48. The Xero accounting software also made it easier to see the figures which helped increase profit in the longer term.
These changes were big and it was hard work, but the result is now that the business has great cashflow , stable and controlled finances, which means that our clients can focus on growing the business, which they have. Selling the business is still one of their options, but that’s much easier when everything is under control and it won’t be a decision made for the wrong reasons.
If you want to get better cashflow find out how we can help you by getting in touch with us at Andrew Price & Co on 01803 296678 or emailing firstname.lastname@example.org. Acountants in Torquay, supporting business owners to have better cashflow and improve profit.