How to manage small business finances during the pandemic

Posted on 4th February 2021 by David Rudd

A person managing finances on a calculator

In between national lockdowns and other government restrictions, it can be difficult for small businesses to plan ahead and budget correctly during this time. If you’re a small business looking for ways to manage your finances and want to know how to increase profitability, despite the uncertainty, then here are 5 ways to do so:


1.Reducing and managing your business costs


If your business has had to limit staff, change operating hours or even close its doors – you may be paying bills you no longer need. It is worth identifying unnecessary expenditure, in particular monthly subscriptions or costs that are made monthly. If you’re using cloud accounting tools such as Sage, Quickbooks or Xero it should be easy to pull this data.

As chartered certified accountants, we have been advising our small business clients across Essex and surrounding areas to review any subscriptions and cancel bills they aren’t using. 


Next, you should try negotiating with your suppliers to see if they will reduce their prices. Suppliers understand the current circumstances and have procedures in place to help struggling businesses. If you can’t cancel the bills because it’s a necessity, speak to the supplier to see if you can lower the cost. As well as product and service suppliers, we would recommend looking at your rent and insurance costs.


You should also think twice before entering into new financial commitments such as leases or capital expenditure. With all the Government grants and deals being offered at the moment, it may be tempting to sign a new monthly agreement on a company van or to take up other financial commitments. Limiting any new agreements you take out as a business during this time will help you be better prepared for any financial changes. 


2. Improving cash flow

Reach out 

As well as negotiating with suppliers on existing costs, you should consider speaking to suppliers about improving credit terms on past and future expenditure too.


As mentioned above, if you want to improve your cash flow, you should rethink before entering into new financial commitments such as leases or capital expenditure. Although your business might have good cash reserves now, it is worth thinking about the future.


Regularly monitoring who owes you money and who isn’t sticking to their credit terms is a great way to manage your cash flow. By staying on top of the necessary data, you can easily chase overdue payments. 

You can also use pre-existing data to plan your cash flow by looking at previous payment history which can be used to predict future payment dates. You should plan accordingly and make sure you always have enough cash in case a customer is late on payment. 


Effective business bookkeeping is a great way to manage your cash flow. Instead of just checking your balance, bookkeeping will enable you to see which direction your future cash flow is heading in.  Read more about how to protect your business by managing cash here. 


3. Understanding your business finances


Most banks offer business bank accounts which you can access depending on your turnover, trading time and/or position in the company. Business accounts will offer more relevant features for your business than a personal bank account. Some of these features include low charges, foreign transactions, access to larger overdrafts, cashback options and access to cloud accounting apps.

A good mobile banking app will allow you to have access to optimise your money – with spending and other alerts – strengthen your account security, provide clarity on your data and provide better controls on your account. 


During periods of uncertainty, reviewing your finances on a regular basis is critical. Finance management for small businesses can be time consuming, however, we would still recommend taking time every week to review your finances. This will allow you to understand if you’re overspending and help manage credit control. 

One of the most simple ways of doing this is by using online banking apps, however, they are limited in their ability to manage cash. Bookkeeping and accountancy is a better alternative. 


As well as using it to improve cash flow, bookkeeping is a great way to understand your business finances more. 


4. Working with HMRC


HM Revenue and Customs’ tax investigation activity has become more proactive in recent years, meaning that HMRC could be targeting your business accounts next. It is important to be wary of tax investigations into all of the taxes your business usually needs to pay (e.g. VAT, Corporation Tax, Income Tax, National Insurance, PAYE and CIS). We are now also seeing investigations into the new COVID support scheme (e.g. SEISS and furlough). 


You should plan for tax payments and deadlines, especially during this time, to avoid unexpected repercussions from HMRC. To stay ahead, it is essential to know when your taxes are due and how much they’ll be, well in advance. Our team can help you stay on top of your VAT and tax commitments, as well as notify you when they’re due.


Know how to take advantage of tax deferrals and what HMRC are likely to accept when negotiating a Time to Pay arrangement. 


One of the best ways to ensure your VAT is paid in full and on time, is to have a separate VAT bank account and ensure it’s regularly topped up. It is useful to have separate bank accounts to manage cash flow, including future tax bills. 

Here at Steven Burton & Co, we’re able to help with all aspects of tax and VAT.


5. Set a business finance goal 

Map out

To help with your small business growth, you should set a realistic cash flow goal. Mapping out goals and monitoring how you’re doing against these goals will help you stay on track.

Professional accountants can help you work towards these goals throughout the year. At Steven Burton & Co, we have years of experience helping to set up as well as achieve business goals, get in touch with us and we can have a discussion around financial goals for your business. 

Seek advice

Save time, save money and increase profitability by seeking a professional to help manage your business accounts. 


We are Steven Burton & Co, chartered certified accountants in Essex who ensure our client’s accounts are being run in the most efficient way. Throughout the pandemic, we have been working with all our clients, including our small business clients, to manage and protect their money. 

If you’re looking for Essex accountants to help you manage your money, then we are here to help. Learn more about the business accounting services we offer and follow our social media accounts if you’re interested in more financial resources for small businesses. 

David Rudd

David is an Accountant with over 15 years’ experience in helping a large number of different business owners in numerous sectors from consulting agencies to every area of construction you can think of.

At home dealing with numerous different types of accounting software from Xero to QBO and everything in between.  David is always on the lookout for new technology to help business owners to create more time for themselves and their teams.

With a healthy ambition of never resting on the results of yesterday, David is at his best when working with ambitious business owners who want to improve their businesses for eventual sale.

In his spare time, David is often found cheering on his two boys at football, building Lego (which he pretends is for his boys) or watching the latest TV series on Netflix.

Learn More

Built on cloud accountancy:

Get in touch

Our friendly customer service team are on hand to help with any queries you may have.

    We'd like to occasionally send you communications via email to keep you up to date with the latest company information. Please confirm if you would like us to contact you by checking yes or no below. You can unsubscribe at any time.

    This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

    LENA James
    LENA James
    We moved accountants to specifically follow David a number of years ago and have completely changed the running of our business for the better, through planning ahead we have managed to change our circumstances with an over drawn loan account and corporation and tax bills outstanding to a strategically run method of being able to clear the over drawn loan account and balance our other tax liabilities with advice and support from David We continue to be supported and take advice from his expert knowledge and guidance going forward and would highly recommend the Steven Burton team for your Accountancy needs.
    Great service. Helpful and friendly people.
    Vince Strafford
    Vince Strafford
    We moved our accountancy needs to Steven Burton and Co - specifically with David. It’s been night and day compared to our previous provider - we now have a partner who is helping us to develop our business and in a way that means we have long term security. Local, accessible and responsive - everything we need in a company that provides business critical services.
    The team here are fantastic - every detail thought of and explained clearly. I have no hesitation in recommending Steve and the team to any business, be it fledgling or established. You get what you pay for and more.
    Jo C
    Jo C
    The team at Steven Burton & Co have been lovely to work with, helping us with our partnership accounts over the last couple of years. They are always on hand to answer any queries we have and are happy to explain in as much detail as we require. Everyone we have spoken to has been polite, welcoming and extremely knowledgeable and we look forward to continuing to work together as our business grows.
    Sam Nagle
    Sam Nagle
    A truly fantastic accountants. Unlike any other accountants we have had in the past. They are 100 percent on the ball, helpful with fantastic advice. Not just sound accountancy advice but advising the business as a whole in various areas. Strategic quarterly reviews to really delve into the business to make sure profit margins are where they should be, and if they aren’t, they’ll look into improvements that can be made. Nothing is too much and the phone lines are always open for advice. Unlike most accountants their focus isn’t just on completing your annual accounts and not seeing you again for another year. I cannot praise the team enough for all the hard work they put in! They really have shifted our focus onto the aspects of the business that we were perhaps neglecting!
    Steve Lincoln
    Steve Lincoln
    The team at Steve Burton & Co provide a first class personal service to their customers. They support business owners through every step of the life cycle of their business, adding true value with their relationship.
    Toby Ishmael
    Toby Ishmael
    I work closely with the team at Steven Burton & Co. to assist their clients with a range of services and I can't speak highly enough of the professionalism and care that they demonstrate for their clients.
    Darren Vass
    Darren Vass
    I've worked with Steven Burton & Co for almost 4 years and I cannot fault their service. Dominique in particular is always available for advice and guidance whenever needed.
    Makala Balls
    Makala Balls
    The team at Steven Burton are friendly, professional and really get to know their clients so their advice is tailored to suit their individual needs. Cuts through all the jargon and offer clear and timely advice. Would highly recommend.