COVID-19 Business Checklist – Six Actions Businesses Should Consider Now

Many businesses are still struggling with cashflow as a result of the Coronavirus pandemic, despite the support on offer.

As the Government continues to lift some of its restrictions, now is the time to review your operations and find ways to manage your cashflow, so that you can begin to rebuild and recover in the weeks and months ahead.

Our experienced team have looked over the various steps that businesses could be taking right now.

Here are our six top tips that businesses should consider at this time:

1) Capital Repayment Holidays

Ask banks and other lenders if you can defer making capital repayments on loans and/or borrowings.

2) Revisit Customer Credit Limits

When the economy recovers, some businesses will undoubtedly fail as a result of having insufficient working capital, and other customers will be higher risk owing to the sectors they work in. One way you can help to minimise your exposure to this, is by reducing credit limits.

3) Schedule Your Tax Payments

Last quarter’s VAT was deferred by HMRC, but it will still need to be paid in March next year. Likewise, your July payment on account for self-assessment will be payable in January.

However, a company’s Corporation Tax bill will be due in the normal way. To avoid being caught out, make sure you’ve scheduled when and how these payments will be made.

4) Match Your Staffing Needs To Expected Demand

Ensure that you are getting the full benefit of the Coronavirus Job Retention Scheme by planning and diarising staff furlough periods to ensure you maximise your claim.

5) Review Your Supply Chain

Can you source items from alternative suppliers, or negotiate more favourable credit terms from existing suppliers? It’s worth looking around or having the discussion with your supply chain, to help your cashflow.

6) Prepare Cash Flow Forecasts For 4-Week And 13-Week Periods

You can check that you have sufficient working capital to fund any expansion in activity levels as the business ramps up. For more information on the points above, or a discussion on your specific case, please get in touch with our team of experienced accountants.

Please note: It is not suggested that businesses cut customer credit limits while taking extended credit from suppliers. Anecdotally, businesses that are judged not to have treated customers and suppliers fairly during this period will be at a disadvantage post-crisis, compared to those businesses recognised as having ‘played fair’, or having gone above and beyond to help their customers, suppliers and communities.

Milsted Langdon has offices in Bath, Bristol, London, Taunton and Yeovil, and offers a large range of business solutions, from routine compliance matters to specialist tax advice and planning, corporate finance, business intelligence, insolvency, forensic accounting and mediation services.

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