Business Law & Compliance
Four things SMEs can do now for a better 2017
4 min read
31 January 2017
The events of 2016 created a great deal of uncertainty, so it’s important to focus on the things SMEs can do now to manage impending legislation and, ultimately, make life easier in the coming year.
Here are four things SMEs can do now to achieve more in 2017.
1) Prepare for auto-enrolment
By 2018, every business in the UK will have a legal duty to provide a pension for staff or risk facing a fine. Many small businesses have already reached a staging date, but 2017 marks the last chance for others to auto-enrol staff. If bosses don’t plan for the additional costs auto-enrolment will have on the business, they could find themselves having to scale back on other investments to make up for the shortfall.
The good news is that there are plenty of resources available to help businesses navigate auto-enrolment and ease administrative tasks. One of the best is an accountant, not only to take care of bookkeeping, but to give advice on critical business decisions. They can help get finances in order and prepare employers to make contributions into their employees’ pension scheme each month. There is also cloud software available to prompt owners on certain tasks to remain compliant, and to stay in control of what to pay, and when.
2) Expect the unexpected
Brexit has left many small business owners worried and confused about the impact it will have on them. Article 50 will be triggered in March and, if they haven’t already, now is the time to consider how to offset any negative impact that Britain leaving the EU could have on them.
This could mean increasing cash reserves, or it could be keeping overseas clients updated on legislation changes and identifying any potential dangers within their contracts – something like fixing rates for one year could be a big help. It’s also important to make sure financial records are up to date in case new regulations come into effect that will require immediate action.
3) Identify late payers
Late payments have affected almost every business at some time or another. However, small businesses are arguably the most vulnerable. Looking back at 2016, were there any practices that could be improved upon to speed up the payment process? Has electronic invoicing been set up, for example? Answering such questions are key among the things SMEs can do now – it can save a huge amount of time by automating the entire process, as well as make it easier for clients to pay.
Indeed, larger businesses are often a significant source of income for small businesses, so the blame for late payments frequently lies with big corporates. Is it time to consider issuing penalties or adding interest for outstanding payments? Small businesses can also offer dynamic discounting – early payment discounts on approved invoices awaiting payment. If the business owner can identify and action these processes, it will make a huge difference in the year ahead.
4) Strengthen the team
January is the most popular time of year for people to look for a new job. So retaining talent is one of the most important things SMEs can do now. Ensure existing employees are happy and address any doubts they might have about the year ahead. Also consider whether the team is missing any expertise and recruit staff to meet business goals.
In uncertain times planning ahead can be the difference between a company meeting bigger ambitions or falling behind. By kick starting the year well, owners can spend more of 2017 keeping a laser focus on making the important strategic decisions that will help grow the business.
Bobby Chadha is a chartered accountant and startup mentor at Intuit QuickBooks