By Manos Schizas, ACCA & Jane Bennett, Forum of Private Business
Many small businesses have been severely affected by the riots that have been taking place across the country over the past few days. Business owners are in dire straits and many face the harsh reality of having to decide what to do with their business – do they pack everything in or start to figure out how they can start again from scratch?
If you are unsure how your firm can help, don’t let this stop you. Many struggling small businesses will just require relatively simple support and explanations on a number of things that an accounting firm is well placed to provide. The following are a few ideas:
Restoring Records
Loss of business records is a major problem for businesses affected by riots. Although business practice has improved over time, often vital records will have been destroyed or even stolen. Luckily HMRC and others are willing to make allowances in these exceptional circumstances as long as reasonable efforts have been made to restore what can be restored and provide estimates of what can’t. A professional accountant can help with this process as well as add to the reliability of estimates.
Employment Law and Health and safety
If staff are unable to show up for work or if they are working fewer hours in order to be able to get back to work safely, business owners may be wondering how to deal with this – especially those that cannot afford to be generous. Alternatively, if business premises have been badly damaged owners may be unable to assess whether there is a risk to their employees that could leave them legally liable. Many accountants have experience of dealing with employment law and health and safety issues and may be able, within limits, to offer advice – or at least direct businesses to appropriate experts.
Sorting out cash flow / Deferring liabilities
Cash flow is going to be the first problem that businesses come up against when picking up the pieces of their business. Could you speak on the business’ behalf to HMRC or other creditors and find ways of deferring some of their liabilities, from PAYE and VAT to loans and trade credit? Are you able to help calculate what sort of finance might help with re-building the business and negotiate with the banks?
Negotiating with insurance companies
Firms will now have the massive task of valuing their business and what they have lost, valuing damaged or stolen goods and property, estimating lost profits and putting in a claim to their insurance company. Some insurers explicitly do not cover against this sort of damage but with others it should be possible to make a successful claim. Is this something you could help one or two businesses with? Negotiating with insurance companies and making sure they get the right compensation is a big task for many business owners.
Continuity planning
Places where riots have taken place recently could be stigmatised for years to come. The survivors will have to not only prepare for the possibility of further rioting themselves but also to demonstrate to their creditors, business partners and customers that they would be able to cope with further instances of rioting and/or looting.
Planning for the future
Many businesses will basically be starting again from scratch. They may have a willing workforce but will need to work out their start-up plans including how they are going to pay the staff they need. Support from a finance professional could help businesses work out how to keep staff on and draw up a concrete business plan for the day after.
Talking to the local council
While local councils are generally doing a good deal to help local businesses, lobbying local government and accessing support can a daunting task for business owners in the best of times. Fortunately, documentation is part of the accountant’s skill-set and many professionals have significant experience of business support mechanisms. If you’re trying to drive specific changes, don’t underestimate the power of expert input, or indeed the political acumen of the profession; ACCA’s surveys suggest that accountants are likelier than most occupations to be involved in local government themselves.
And finally: doing the right thing, the right way
Even when their work is motivated by things other than personal gain, accountants need to abide by the rules of their respective professional bodies. ACCA members with a Practicing Certificate can advise all businesses, but those without can only advise businesses if they are certain that they would not be in breach of the global practising regulations or other requirements. More information can be found in the links below:
ACCA Practicing Certificate information
ACCA Rulebook - public practice section
Money Laundering Regulations guidelines.
You also need to remember that most small businesses will already work with an accountant. If you are approached by a business that turns out to already have an accountant, then you should make sure to contact them before agreeing to do any work for the business.
This factsheet has been provided by ACCA (the Association of Chartered Certified Accountants) and the Forum of Private Business – a not-for-profit business support organisation, supporting thousands of small businesses across the UK.
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