Possible corporate restructuring solutions
Even whether your company is degrading slowly or rapidly, it is critical to act quickly in order to prevent more harm or even catastrophic collapse of the organization. Each sector of a company empire, regardless of its size, should be forensically examined on a regular basis to verify that it is working properly and producing the required results. If your company is facing financial difficulties, it may be necessary to take a step back and reevaluate your plan in order to avoid going deeper into debt.
The whole first stage in determining whether or not a company is in serious financial trouble is to perform a balance sheet and cash flow test for bankruptcy in order to discover the company’s weakest financial areas and identify its most vulnerable regions. If your company has gaps in its balance sheet and inadequate cash flow as a result of factors such as lax credit control methods and high-value liabilities, you will need to reassess your operational strategy and restructure your organization. According to Keith Tully of Real Business Rescue, there are a variety of restructuring solutions available to failing firms that may aid in the revitalization of the company.
Administration of the company
Companies administration is an option for businesses that are insolvent, meaning they are unable to meet their financial obligations, are under creditor pressure, and are experiencing cash flow problems. It allows you to avoid liquidation, which would essentially spell the end of your company’s existence. When a company is placed into administration, a professional insolvency practitioner assumes authority over all of the company’s affairs. They will be in charge of realizing assets and repaying creditors, as well as reviving the company’s operations.
Company voluntary agreement (CVA) and fast track company voluntary arrangement (FVA)
Unsecured Company Voluntary Arrangements (CVAs) are an insolvency process performed by a professional insolvency practitioner that enables you to restructure your obligations into manageable payments, subject to the approval of your creditors. A CVA is simply a payment plan for a specified period of time, often 3-5 years; but, in order to qualify for one and be legally obligated by the payment arrangement, the proposal must be approved by 75% of the creditors (in terms of total value). Amounts of debt that may be forgiven vary depending on the financial strength of the company.
As a result, throughout the Company Voluntary Arrangement, the firm will be shielded from legal action by creditors, making this approach the best feasible option for creditors to earn a return while boosting the likelihood of an agreement.
However, the most suitable option will be decided by the severity of your company’s financial troubles. A Fast Track CVA is a conventional Company Voluntary Arrangement compacted into six weeks.
Arrangements for payment timing
TTP arrangements are a formal request to HMRC for them to restructure your tax responsibilities, including as payroll taxes, VAT, and corporation tax over a period of time, often 12 months. TTP arrangements are available for both individuals and businesses. If your company is experiencing severe financial difficulties, HMRC may consider a longer-term solution.
If you fail to make payments to HMRC on a consistent basis, the internal system may indicate your company as being in financial distress or being insolvent, making a TTP an ideal option to put in place before you fall behind on payments and incurring more penalties and interest. Your capacity to realistically make repayments under a Time to Pay agreement will be assessed by HMRC, and their decision will be based on your financial ability to do so.
Following the coronavirus epidemic, the scope of this policy has been broadened in order to provide companies with more time to meet their tax obligations by giving the required breathing room to do so.
Finance and financing for small and medium-sized businesses
If your company is in desperate need of a financial injection to get it back on track, obtaining financing might provide the funding it needs to get back on track. There are a variety of commercial financing options available that may be personalized for either the short- or long-term, allowing you to increase cash flow and expand your business by taking on additional customers, replenishing inventory, and investing back into the company.
Commercial finance may be adapted to your specific requirements. For example, if you want new machinery to fulfill an order, you can apply for business equipment financing or investigate lease buy possibilities. If your company is experiencing a shortage of people to implement credit control, an invoice financing facility may be an effective solution, allowing your struggling company to obtain payments in advance. Another option would be to get a regular bank loan, which would allow for more competitive conditions and aid you in the reorganization of your company.
Financial distress symptoms experienced by each organization may differ, and no restructuring guidance can be given in a universal manner owing to the quantity of information pertaining to obligations, assets, and other mitigating variables that must be taken into consideration. As long as your company is enduring financial difficulties as a direct consequence of the coronavirus pandemic and is otherwise viable, you are covered by the temporary ban on unlawful trading provisions, which will last until the end of September 2020. Wrongful trading is defined as trading while intentionally insolvent, and if this is infringed outside of the suspension time, you may be held personally accountable for the damages suffered by the firm in question.
A registered insolvency practitioner will be able to help you in identifying the most appropriate restructuring strategy for your company, therefore seek professional guidance as soon as possible after determining your situation.
5 accounting techniques for eCommerce growth
Increasing the size of a company does not imply just earning more money. In order to do so, you must get familiar with the tiresome aspects of business, such as liquidity levels and inventory control.
There are five accounting techniques that may help you expand your eCommerce company: tracking cash flows, optimizing Cost of Goods Sold, business bank accounts, inventory management and bookkeeping are some of the topics we’ll discuss.
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To begin, establish a company bank account.
Open a company bank account, which is the first step in getting things going. It seems to be a simple error, but you’d be shocked how many ambitious entrepreneurs make it early in their careers and suffer the price later on.
It creates complexity and ultimately costs money and effort to combine your company banking and personal financial accounts.
Distinguishing between professional and personal expenditures—drawing a clear line between the two—makes it much simpler to maintain track of your finances. Your tax time will be less of a problem (or at the very least, less of a headache), and your prospects of obtaining funds from possible creditors and investors will rise.
Afterwards, you’ll have the distinct impression of being a serious businessperson.
2. Maintaining a positive cash flow situation
It is vital to have a clear and complete understanding of your company’s financial status. It’s important to remember that accounting involves more than just totaling up your spending and revenues. A bit further investigation is required.
A smart place to start is by being familiar with your liquidity levels. A better knowledge of your payment cycle will help you to prepare for the future, which is crucial in order to implement long-term growth strategies. Take advantage of this by ensuring that your cash flow statements are up to date and accurately recorded.
3.cost of goods sold (cogs)
Interestingly, many company owners do not include labor costs and rent in their list of business expenditures. Knowing just how much money you’re investing in a certain activity, on the other hand, is essential.
This is referred to as the Cost of Goods Sold (COGS), and it is based on the product’s price.. Do you know how much it costs to purchase the necessary materials? How much money do you plan to spend on the final product’s manufacturing? In order to sell it, how much money have you spent?
It is a subtle but effective gamechanger to understand COGS since it allows you to keep expenses down while improving profits. You’ll need the most reliable and exact method of documenting these costs if you’re going to get the most results out of this exercise!
4. Keep track of your inventory
Keeping track of your stored goods—their dimensions, location, quantities, and weight—is essential to successful inventory management and management of inventory.
This can assist you in lowering the cost of inventory management since you will be aware of when you are running low on supplies or have too many supplies on hand. – It will also assist you in determining whether to stock up on items and purchase more supplies for their production.
Please believe us when we say this: Inventory management should become an unbreakable and permanent part of your company’s operations. You’ll be able to simplify your company operations if you have a firm handle on your inventory.
5) Create an organized system of record-keeping.
Numerous individuals mistakenly believe that bookkeeping and accounting are interchangeable terms. A blunder has occurred. They’re similar to a married pair in that they go hand in hand but aren’t the same thing at the same time.
In simple terms, bookkeeping is the activity of documenting and categorizing company transactions on a continuous basis—basically, it is the collection and collation of financial information. Unlike other professions, accounting is highly analytical, requiring the interpretation of data.
When it comes to developing strong company practices, having a robust accounting system is vital. There are a variety of approaches that may be used, including (but not limited to) the following options:
It is possible to do it on one’s own. On the internet, you’ll find a wealth of accounting software. An Excel spreadsheet, on the other hand, is an option if you’re feeling really daring.
A part-time bookkeeper may be found online or in your local area for a reasonable price.
Incorporate an in-house bookkeeper or accountant into your business.
By being familiar with the guts and bolts of bookkeeping, your company operation will be able to prosper. Additionally, by using a platform such as Osome to automate your financial administration, you will be able to simplify and expand your operations.
How to combine the advantages of both online and physical shopping
Ecommerce retail sales have increased by 29.1 percent in Central and Eastern Europe and by 26.3 percent in Western European nations since the beginning of 2020, thanks to substantial developments in the retail business.
Likewise parallel, eMarketer forecasted that brick-and-mortar retail would decline in the United Kingdom by 2021, but will still account for 62.5 percent of the country’s retail environment. In a similar vein, a recent poll conducted by BigCommerce and PayPal discovered that over 40% of UK customers still prefer in-person purchasing.
Future retail firms must change their strategies to include a hybrid strategy that incorporates both online and offline activities in order to meet consumers where they are and provide a smooth experience across all touchpoints.
Here are some of the most important actions you can take to prepare for a successful hybrid commerce experience.
1st, provide top priority to fulfillment in physical shops.
While click-and-collect, also known as buy online, pickup in-store (BOPIS), was already fairly popular in the United Kingdom — with 64 percent of retailers offering it, according to a recent survey — it was still in its infancy in the United States and other European countries, according to a recent survey. Of course, as soon as the epidemic struck, its popularity exploded, and there is no hint that it will be slowing down anytime soon. It is being used in innovative ways by our merchants to get customers to visit them in-store.
A recent unique deal for chocolate-covered strawberries released by BigCommerce seller Lammes Candies allowed buyers to purchase from the pre-sale online and arrange pick-up in-store. Because they were not willing to ship, this was an excellent method to leverage a website to attract internet visitors in-store for exclusive bargains.
2. Develop a digital shopping experience in-store.
The number of buyers using their cellphones for contactless payment alternatives, such as digital wallets, has increased in recent years, both online and in-store. In addition, digital shopping experiences in-store are gaining popularity. Despite the fact that this notion is not new in many parts of the world, buyers nowadays expect to be able to whip out their phone, open an app, and search for the precise location of the goods they’re seeking.
Even though augmented reality (AR) and virtual reality (VR) failed to acquire popularity in the way we all expected back in the late 1980s and early 1990s, they are now gaining traction because they can assist buyers in making better, more educated purchase selections – both online and in-store. Fashion retailers may use augmented reality (AR) on their ecommerce sites to enable shoppers visualize how items would appear on their bodies, for example — which is not only a terrific option for distinguishing the ecommerce experience, but it can also help minimize the amount of returns for online purchases.
3. Make the offline experience available online.
We’ve seen a transition to virtual events and experiences in recent years, mostly as a result of COVID, but that doesn’t take away from the fact that they are still a fantastic way to develop community, increase brand recognition, and create unique experiences that were previously only feasible in-person.
To explain how to use your goods and connect with clients, virtual courses are now a viable option. Users may also examine things in more detail and have their queries addressed in real time via the use of livestreaming, which can be connected with ecommerce websites and social media applications such as Facebook Live Shopping and the famous TikTok.
Create an omnichannel strategy to provide customers with a seamless purchasing experience.
There is a blurring of the borders between physical and online shopping experiences, opening up exciting new potential for firms. Retailers’ ability to harness current trends and concentrate on the omnichannel customer journey in order to create a smooth hybrid shopping experience across all touchpoints, both online and offline, is critical to their long-term success (to learn more about omnichannel commerce success you find the, BigCommerce Omnichannel Guide here).