Written by Ged Cosgrove, group managing partner
Global events continue to test businesses around the world and our clients are no exception. Just as life seemed to be returning to some sort of normal, the conflict in Ukraine has presented new challenges to overcome.
The cost of running a business is soaring. It’s been well documented that energy prices are at record highs, which we know is already causing concern for many, both in business and at home. But there is a myriad of other factors at play, too.
We’re operating in a candidate-led labour market, meaning recruitment is a challenge as businesses compete for talent. Meanwhile, we already see the impact of the conflict in Ukraine on supply chains. Ukraine is a rich country, particularly in terms of its agriculture and mineral exports. Ukraine’s output has been hit by a tsunami. We will most certainly feel it, and whether by sourcing alternatives or adjusting how we operate; most of us will need to respond to it.
We’re advising all our clients to review profit and loss and plan for every eventuality, as there are clear steps we can take to protect ourselves, our businesses, employees, customers and futures.
This is where an accountant’s role as a true business advisor really comes into play. We’re here to support our clients in taking positive, proactive steps, before they are forced to react under pressure in the coming months.
It’s time to review every cost across your business and identify where savings can be made. Fixed rate, long term deals are likely to be a good choice, for example, to mitigate inflation.
Clients are also increasingly interested in the benefits of switching to electric company cars and leveraging the tax advantages on offer. Making the switch will prove lucrative, but it’s important to note that the sooner you make the change, the longer you’ll be able to enjoy the savings. As electric cars gain popularity and become more mainstream, the tax benefits are expected to decline as electric cars begin to fall in line with taxation rates for petrol and diesel vehicles. Our advice is to invest now and leverage the 2% benefit in kind tax rate for 2022/23 on electric cars.
While we’ve known about these impending rising costs for some time, many businesses are only just beginning to react. There is no time like the present. As strategic business advisors, we’re here to help you make smart decisions, now, that will have a long term impact and shore up your business against the financial challenges ahead.
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