Making it easier to grow your law firm

Search

This section covers succession, specialisation, mergers, selling a law firm, becoming a partner, and business structure

How to set up your firm’s systems to provide the information that enables you to improve profitability and cashflow

How to avoid professional negligence claims, with examples of common problems and suggested solutions. Plus FAQs on PII

This is a new section and only covers SRA Accounts Rules and GDPR at the moment. More articles will follow

How to protect your law firm from cyber attacks. What steps to take if your systems are hacked

How to recruit and retain a team that is both happy and highly effective, dealing with the HR issues along the way

In marketing, like anything, you need to get the basics right. Otherwise the time and money you invest in marketing will be wasted

How to win new clients, make the most of existing relationships, encourage referrals and generate new leads

How to approach creating a law firm website that works, from agreeing your objectives to making sure you get the results you want

Why lawyers need to know about social media, how to make the most of the opportunities and how to avoid potential pitfalls

How to use PR to build your firm’s reputation; and how to create cost-effective advertising – traditional and online – that delivers results

Cash flow management during Covid-19

Andy Poole

Andy Poole, a partner in accountants Armstrong Watson, lists nine steps to help law firms better control their cash flow during the current pandemic. (24 March 2020)

As the COVID-19 outbreak progresses, the challenges to businesses are becoming more visible. By being aware of actions that you can take to improve your position, it will help with overcoming the issues that you may encounter.

Here are our top tips to help you deal with the challenges that you may be facing:

  1. Prepare a 13-week short term cash flow forecast to identify what your business’ cash position looks like on an ongoing basis. This should be a rolling document that is used as a management tool not only to assess what payments can/should be made but also to ensure all parts of your business perform as well as they can.
  2. Review your direct debits and standing orders to ascertain which payments are business-critical.
  3. If you have missed a tax payment or you might struggle with your next payment due to COVID-19, you can call HMRC’s dedicated helpline: 0800 0159 559. This can cover corporation tax, income tax, VAT and also PAYE. Our initial feedback is that HMRC are being incredibly flexible on this.
  4. Determine whether your staffing levels are adequate and seek advice if you need to reduce the workforce/hours. Consider utilising the government's new Job Retention Scheme.
  5. Understand what your debt obligations are (both for the business and the directors personally) and seek to negotiate payment holidays if appropriate.
  6. Seek rent payment holidays where possible.
  7. Speak to your customers to obtain payment dates for outstanding debtors – consider their ability to pay if agreeing to longer terms.
  8. Negotiate with suppliers to ensure your ongoing orders can be sourced and delivered; identify alternative suppliers for any business-critical item.
  9. Ongoing funding is likely to be a concern for many. For any funding that is required, if you cannot demonstrate to a funder that you have taken the above steps then it will be more difficult to obtain funding, whether or not backed by the government. Now is the time to take action, even if you have a buffer that may see you through a short period. Contact your current bank/lender and consider the government's loan scheme.

In addition to the above, it is important to note that company directors have to ensure that they continue to comply with their statutory obligations under various pieces of legislation, including (but not limited to) employment, health and safety and company laws.

And finally, communicate, communicate, communicate!

 

(This article first appeared on the Armstrong Watson website: https://www.armstrongwatson.co.uk/services/covid-19-and-your-business/cash-flow-management.)

 

See also:

Stay up-to-date with business advice and news

Sign up to this lively and colourful newsletter for new and more established small businesses.