FINANCE
by Anna Bowes, director, Savings Champion
Increase your business savings interest by up to four times
At Savings Champion we are passionate about savings. As one of the UK’ s leading independent experts on cash-based savings and one of the most quoted in the national press, we provide businesses with unbiased, personalised guidance on how they can earn as much interest as possible on their working capital- on average around four times what they are getting now.
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Businesses are missing out on £ millions a year in interest payments by leaving cash sitting in bank accounts that are paying little or no interest.
According to the latest research from Hampshire Trust Bank, on average, UK SMEs have savings balances of £ 446,000. Nearly a third of respondents( 30 %) stated that they intend to increase their savings balances over the next 12 months to help cushion any potential financial bumps in the road, amid nervousness about economic uncertainty. Just 14 % intend to reduce the amount of money they hold in savings, with the majority( 56 %) looking to maintain their current savings level.
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Whichever way you look at it, that is a significant amount to be held in business savings, so all SMEs could potentially benefit from paying more attention to their savings accounts and returns.
However, many SMEs routinely opt for the savings account offered by their current account provider and as a result are earning little or even no interest at all, missing out on a useful source of income. The research also pointed out that, on average, SMEs hold £ 409,000 in their current account. The key question is – do businesses really need to keep this much here?
Our advice is to make every pound count, making the most of opportunities
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to save for future growth. Even in this low interest rate environment, there’ s a lot more that you could make for your business, simply by putting that money into better-paying accounts.
But business owners often have better things to do than worry about the interest they can earn on the cash they hold. That’ s where we can help. For those who would like to make their cash work harder but simply don’ t have the time or the expertise, our Cash Advice Service helps businesses maximise the amount of interest they can earn.
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If you would like help with finding a suitable home for your business’ s reserves or would like to find out more about our Cash Advice Service, contact us on 0800 011 9705.
For more info: www. savingschampion. co. uk
@ savingschampion
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Businesses are heading towards a cashless, digital society
by Ian Lloyd, partner, Milsted Langdon
At the start of 2018, it was revealed that for the first time debit card transactions will overtake those made with cash this year.
Driven by advances in technology, such as contactless payments and online bank transfers, businesses’ relationship with cash is undergoing a fundamental change.
ATM usage peaked several years ago, with more than 2.9 billion transactions taking place in 2012, falling to 2.7 billion in 2016, which amounted to £ 6 billion less than in the previous year, while figures from the Bank of England show that the volume of cash in circulation is increasing at its slowest rate in 46 years.
In comparison, figures from UK Finance shows that the number of contactless payments has increased from 17.8 million in March 2014 to 469.6 million in June 2017, with the value of these transactions increasing from £ 116 million to £ 4.3 billion.
How should businesses prepare? With such a large volume of transactions, it is essential that businesses of all sizes, including sole traders, consider how they process digital payments.
12 THE BUSINESS EXCHANGE 2018
Research shows that a growing number of consumers will willingly shun a business if it is unable to take payment by card.
This should be all the more worrying for businesses that are unwilling to adapt, as in most cases they will instead choose to use the services or buy products from a business that does have facilities to take digital payments.
With a number of simple and costeffective mobile card reading solutions on the market, it has never been easier for companies to take digital payments.
How does this tie in with the wider world of business? Businesses are not the only organisations to be tackling the digital revolution head on, in fact, one of the biggest changes in taxation is less than a year away now, as HM Revenue & Customs will introduce Making Tax Digital.
Due to begin on 6 April 2019, Making Tax Digital( MTD) will initially see all businesses over the VAT threshold(£ 85,000) report their VAT records on a quarterly basis using HM Revenue & Customs( HMRC) compliant software.
This will be followed in subsequent years by quarterly reporting of income and other taxes using a similar system.
The changes to the tax system will require companies to submit their VAT and accounting records four times a year, rather than one, and so they need to ensure they are ready to meet this requirement.
In most cases, businesses may be able to use existing online accountancy packages to report to the Revenue as long as they are MTD-friendly, but many businesses are yet to get to grips with the systems that are required.
illoyd @ milsted-langdon. co. uk 01225 904940
For more info: www. milsted-langdon. co. uk