Hep2O Finance Masterclass: How to Covid-Proof your finances

As we enter the New Year, how can plumbers and heating engineers make sure they future-proof their finances and keep growing their businesses?

To find out, Wavin Hep2O caught up with Steven Glicher, a consultant at Harts Chartered Accountants, to get some top tips on how to best look after your finances in these trying times. Here’s his helpful advice:

Why having a business plan is a must

Most businesses operate without any kind of business plan or strategy, but during this tough recession, it’s even more vital that you create some sort of plan. It could be a business plan for the next 12 months, or a strategy for the next five years. It doesn’t matter what your plan looks like, it’s just important to have something in place.

At Harts, we’ve worked with a number of tradespeople to develop a business plan. We look at where their clients are now and where they want to be in future, and then we form a route on how to get there. This creates goals that keeps clients focused during what is otherwise a stressful and confusing time, making sure the business continues to grow.

What support is available for the self-employed?

If you’re a self-employed plumber, or operating as a limited company, many of you will have deferred your VAT payments earlier this year. That VAT payment was due to be made on 31st March 2021, but if you opt in to the deferral scheme, you can pay this in more manageable instalments. You can decide how many instalments you’ll need, from a minimum of two up to a maximum of 11 equal payments – just make sure you’ve paid in full by March 2022. You can opt in at the beginning of March 2021, but make a note of this in your diaries as you need to do this manually.

There are also grants available for plumbers to help you get onto the road to recovery. However, as grants are distributed by local authorities or growth hubs, it’s best to get in touch with your local authority to see if you’re eligible. Grants tend to come and go at regular intervals, which means that even if you’ve missed one grant, further funds may be released in future, so keep an eye out.

What loans are available?

As a result of Covid, the government has set up loans for businesses to get back on their feet. Many of you will have seen the Bounce Back loans that allow you to borrow up to 25 per cent of your turnover, up to a maximum sum of £50,000. This is a great option for businesses as there’s no repayment for the first 12 months and the interest is paid by the government for the first 12 months too, with the full term being 10 years.

If you’re in need of a larger loan, the Coronavirus Business Interruption Loans Scheme (CBILS) may be a better option. With this loan, you can borrow far larger sums of up to £250,000 and the interest rates are 2.5 per cent.

How can you take payments in a Covid secure way?

Plumbers can take payment in a Covid secure way by taking bank transfers directly into their accounts. Just provide your bank details to your customer and they can pay you directly. If you’re using a cloud accounting app, this will link with your bank account, keeping your records up to date.

Apps such as https://gocardless.com/GoCardless are not only useful to set up contactless payments; they can also help you to deal with customers who are struggling to pay in full, and you can set up direct debits for customers, meaning that they can pay you on a monthly basis. Although there is a charge for this, it does mean that you receive your money regularly.

If you need help with your finances or have any questions, please feel free to get in touch with Harts.

And for more tips on keeping your finances in check, as well as advice on marketing your business, watch all of the Hep2O masterclasses in full here.