Anyone with a December 31st Year End will be fast approaching their CRO filing date. They need 2008 year end accounts signed off by their accountants and their tax filing and companies office paperwork completed. It is strange how financial items suddenly pop up out of nowhere. Directors take more cash than their wages are calculated for, leaving a new tax liability that needs to be included in the year end accounts. Trying to verify the stock valuation with the exchange rates all over the place and the stock counted at 31st December, was it really worth that much money? Customers who looked liked they could pay you at the 31st December, now can’t pay you.
Motor vehicles bought on leases are now parked as there are no staff to drive them. But they still need to be taxed and insured. There is no market for second hand or new vans. What value do you place on these assets in your balance sheet? You need to find alternative uses for them, such as renting them to a subcontractor working for you, or a former employee who is now doing other work but can’t afford a van himself.
The best everyone can do at the moment is put a line under 2008, write off as much as possible in costs. Their is no point is showing a smaller loss or squeezing out a profit as it will make no difference to your bank manager, he simply wont give you any money. This is a good time for everyone to look at their profit and loss and balance sheet and clear out all the debris. Just make it clean. Show the true (realistic) value of your assets and know exactly your liabilities especially taxes and suppliers. With all this done 2009 and 2010 profit and loss and balance sheet will then show the true state of your trading performance and you will know that those financial figures are real.
These figures should also force you to examine your whole business and see what is making money and what is not, and where necessary make cuts in costs, drop products, drop customers and consolidate. In the boom times you made money and took on more and more responsibilities, more markets, more products, more people and as you make cuts you may find that you can make more money now then you did when you had a business that was much bigger. This smaller leaner business is easier to manage and you may have just safeguard your future and your businesses future.