Operating costs have increased for 90% of businesses according to a new survey from the Federation of Small Businesses.
Almost half of the British companies surveyed said that rising costs would stall growth this year.
Rising food and fuel costs pushed inflation to a 30 year peak in February this year. A study from Cornwall Insight, meanwhile, showed that business gas prices increased 250% in the first quarter of 2022, compared to the same period last year.
Peter Langham, Head of Operations at CloudAccountant.co.uk said:
“Energy, fuel, raw materials, food, labour – almost everything is getting more expensive. After two years of Covid disruption, rising costs is another tricky challenge for UK businesses.
If you’re worried about rising prices, you should definitely speak to your accountant. These are exactly the kinds of problems that accountants love to help their clients with.”
In this blog post, we’ll share four ways that an accountant (and cloud-based accounting software) can help you cope with rising costs.
1. Help you understand your costs
Most business owners know that understanding costs is key to success, but many don’t have the right tools or skills to do it effectively.
An accountant can help you analyse the costs associated with products, market segments and key customers, making it much easier to plan for the future.
Cloud accountancy software like FreeAgent and Xero have a range of accessible reports to help you drill down into your finances.
2. Save you money
One of the best ways to cope with costs rising in one area of your business is to reduce spending in another.
Accountants love saving money, especially when they can help boost efficiency (and save on taxes). If your business needs to find more significant cost savings, an accountant will also be able to advise how to do this with minimal impact on operations.
If you prefer to do it yourself, cloud accountancy software breaks down spending areas to help you identify savings.
3. Help you increase prices
Increasing prices is usually unpopular with customers, which is why businesses are often reluctant to do it. But sometimes it’s unavoidable.
An accountant can play an important role in rising prices. They’ll be able to help you find the best (i.e. most profitable) price for a product or service and can help communicate price increases to make them easier to swallow.
4. Plan for taxes
When you’re trying to keep up with price increases, it’s easy to take your eye off other responsibilities. But if you forget about your taxes, your business can get stung.
An accountant will help you plan for taxes so you’re never caught out by an unexpected bill.
And cloud accounting software’s Making Tax Digital functionality makes it easier to stay on top of complex taxes like VAT.
For more information or advice, speak to a member of our accounting team today. Call: 0808 281 0303.