How to Minimise Late Payments

As a small or medium-sized business (SME) owner it’s essential that you’re paid on time by your customers, as having strong cash flow; payments coming into your business on a regular and timely basis; is absolutely essential to the success of your company, especially in the beginning.

Late payments are a natural part of doing business, but this doesn’t mean they can’t be minimised when you take consistent and appropriate steps to vet your clients and customers, provide them with multiple methods of payment, and, should it become necessary, apply interest charges to late payments.

With a recent YouGov poll approximating that 85 percent of all small or medium-sized businesses across Britain have had to deal with late non-payments by their clients and customers at some point, knowing how to minimise late payments will put you ahead of your competition in ensuring that every invoice you send out, gets paid.

1) Do Your Homework

The number one way of knowing whether a new client or customer is going to pay their invoices on time is by doing your homework by checking their credit ratings; much like companies that bill your business (or you personally) on a multi-part basis will check your credit rating ahead of time to provide them with historic assurance that you’re likely to pay their bills.

Unlike with larger companies, where the threat of being taken to court for not paying an invoice looms large, SME’s are historically taken advantage when it comes to late and non-payment. When you check a new client or customer’s credit rating ahead of doing business with them, you dramatically reduce this risk.

2) Provide Multiple Methods of Payment

Though this shouldn’t be necessary, if providing alternative payment methods to your current list increases the chances of a customer or client paying on time, it’s worth it (assuming a particular payment method doesn’t charge extortionately-high fees).

If your client tells you they’ve popped a cheque in the post (but it won’t arrive for several days), if they were late in sending out their cheque in the first place it’s within your right to ask them to pay you using a different method, with the more options you provide them reducing their excuses for not getting their payment to you as soon as possible.

3) Always Apply Interest to Late Payments

Of course sometimes, despite your best efforts to reduce such a scenario, a client or customer  will still hold out on paying you for as long as possible.

For this reason, you should consider adopting a policy whereby you always apply interest to late payments. British companies have a statutory right to charge interest on late payments, with this interest rate currently set at 8 percent. With that said, you should be wary of applying interest to late payments by your regular clients and customers (as well as newer customers spending a lot of money), as you’ll want to preserve a good relationship with them. Should late payment continue, however, you should look into sending a late-payment reminder letter, followed by a second reminder letter, followed by a final reminder letter detailing the interest they are about to be charged, and any legal proceedings and debt collection services you are intending to employ.

You'll be glad to know that in addition to these top tips, managing your businesses cash flow has recently been made a whole lot easier with a ban on anti-invoice finance terms. Click the link to find out more.

Experienced SME Accountants

To speak with a professional accountant to discuss how we can help you keep track of any late and non-payments by your clients and customers, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.

Alternatively, feel free to read our blog for industry information from the experts perspective.

Claiming R&D Relief is Now Faster and Easier


The new Research and Development (R&D) plan, which came into effect last month, has been designed to simplify the process of R&D relief claims for small and medium-sized businesses, while making an effort to increase awareness of the relief among small business owners who are already investing in this area.

With the new Research and Development (R&D) plan the government have handed a boon to small business owners who have previously been put off by the high cost of entry into spaces and sectors that require a substantial amount of research and (ultimately) product development before they can even think about turning a profit.

Financial secretary to the Treasury, David Gauke, said of the new plan:

“R&D is crucial for the long-term growth of the UK economy. Over 15,000 SMEs claimed the relief in 2013, an increase of around 19 per cent from the previous year, but we need to go further to support pioneering small businesses. That’s why we’ve published a document setting out our plans to increase awareness and make it easier for people to apply.”

Claiming is Now Faster, Easier

Here at Tax Agility we believe you should claim all the tax relief your small business is owed in order to maximise your take-home pay. The new Research and Development (R&D) tax relief is no exception.

According to government figures, the 15,000 plus small and medium-sized businesses who claimed R&D tax relief in the 2013-14 tax year received £1.75 billion in tax relief during this period, a saving that is as beneficial to British innovation than it is to the companies themselves.

For this reason alone, the government are striving to make the application process faster and easier for small business owners so they can begin investing in R&D as soon as possible, safe in the knowledge that they’re receiving the tax relief they’re entitled to. Producing an infographic entitled Making R&D Tax Relief Easier, the government outlined the four areas in which they’re working to improve access to R&D tax relief (awareness, design, understanding, and administration), alongside the ways in which they’ve achieved this this year, and the ways in which they plan to continue achieving this in the next two years.


In order for your small business to receive the R&D tax relief you must have an annual turnover under £2 million, and you must have fewer than 50 employees.

If you meet these specifications and you wish to receive the relief for any planned (or continuing) R&D in your company’s field, you can receive advance assurance on the R&D tax relief from the government, providing you with some much needed certainty surrounding the tax you’ll be paying, and the reliefs you’ll be able to claim against it, going forward.

Experienced Tax Accountants

To speak with a professional accountant to discuss the tax implications of the new Research and Development (R&D) plan, or for anything else, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.


For information on further government incentives in the form of tax relief, click here.

Financing Your Small Business in 2016


We appreciate that, in this day and age, financing your small business can be difficult. That's why we're here to help guide you along the way.

Though not all of the below options will be available to you and your business, they each provide options for financing SME growth that have either been long-time favourites (see: investment finance, loans and overdrafts), or that are becoming more popular every year (see: crowdfunding and presales).

Keep in mind that before looking too deeply into any of these options, you should consider exactly how much financing your business needs (a monetary value) to achieve its current growth goals.

Investment Finance

Investment financing comes in many forms, from angel investors looking to help get your startup off the ground in exchange for a (potentially) 10 percent or greater stake in your business, to  venture capitalists offering you a much greater amount of investment income, for a much smaller stake, once your startup has begun to prove itself. Both of which can prove a lucrative solution to financing your small business. 

If you're interested in the different types of business financing, click here.

Loans and Overdrafts

Financing your small business with loans and overdraft income provides you with the benefit of getting necessary financing without having to give away any of your company, but unlike receiving investment finance, loans and overdraft financing can be very inflexible and, in the case of overdrafts, you may have to repay them on demand. This presents a company wide risk that could leave you on the back foot. 

Government Grants

Government grants are an excellent source of SME and startup financing, especially if you’re lucky enough to be rewarded one with no strings attached. Naturally, however, competition for these grants is tough, and although it’s good to apply for any grants your business could potentially be considered for, be sure to look into other methods of financing as well.

The EIS and SEIS

We’ve spoken about the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) numerous times on Tax Agility in the past, so we’ll keep this section short. For more information on both, follow the links above.

Invoice Financing

Though arguably the least exciting method of SME financing on this list, invoice financing consists of:

- Factoring: An invoice financier pays you a percentage of each invoice owed upfront, then collects the money owed by your customers, before handing you the remainder and you paying them their fees, and

- Invoice Discounting: Similar to factoring, except an invoice financier lends you money against your unpaid invoices, with you paying them a fee. Once your customers pay these invoices, the remainder goes directly to your invoice financier.

Update: Ban on Anti-Invoice Finance Terms makes Invoice Financing even easier.


Online crowdfunding has been with us for several years now, and it doesn’t look set to go away any time soon. The draw is obvious: for a startup looking to get off the ground, crowdsourcing provides them with a platform from which to advertise their products and services while raising finance relatively quickly from around the world.


Similar to crowdfunding, online presales allow startups to raise financing before they even produce their product by successfully advertising your soon-to-be product on their platform, asking for your customers to pre-order (and pay for) the product before it’s made, then using the money generated to go away and physically produce your product.

Experienced Accountants

To speak with a professional accountant to discuss the preferred methods for financing your small business or startup, or for anything else, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.

Expanding Your Small Business Overseas?


If you’re a small business owner wondering about the potential of doing business overseas, you’ll be pleased to hear that this is something the government are currently trying to get behind as a part of their ‘Business is Great Britain’ campaign:

“Businesses who choose to sell overseas become 34% more productive in their first year while those already selling overseas achieve 59% faster productivity growth than non-exporters. UKTI can help you succeed overseas. The figures are compelling: on average businesses earn £100,000 in additional sales within 18 months of working with UKTI. This could be you.”

But what exactly are the benefits, risks, and considerations you should keep in mind before taking the plunge and expanding your (hopefully already successful) small business into new lands? According to the above-mentioned UKTI (UK Trade & Investment):

“With global online retail sales increasing by 17 per cent per annum, the opportunities for British businesses are huge.”

That’s reason enough, to start. So, here at Tax Agility, we decided to produce an informative piece on doing so. 

The Benefits of Doing Business Overseas

There are, as we’ve already touched upon, many benefits to expanding your small business overseas, some of which are downright obvious, while others you may not even have considered:

    • You open your small business up to more customers and, with it, more revenue.
    • Your business won’t be dependent on the British market alone.
    • You’ll improve your business’s efficiency abroad and at home.
    • You’ll gain a competitive advantage at home thanks to the inspiration, learnings, and general skills you learn from the overseas side of your business.

The Risks of Doing Business Overseas

Of course, as with any reward comes risk, with the risks of expanding your small business overseas numerous. It’s always important to go into a foreign situation (both literal and metaphorical) with your eyes wide open:

    • Do your research: Thoroughly research the countries you’re looking to expand your small business into. Contact an International Trade Adviser at UKTI; they’ll help you to research your target markets and new potential customers. 
    • Speak with your bank: There’s a good chance you won’t gain a return on investment in your first year.
    • Perform a strong risk assessment: Assess the risks of everything from the likelihood of your new customers actually paying you on time (or at all), to the quality of the insurance options that are available to both you and your suppliers.

Considerations When Doing Business Overseas

There are an enormous number of things to consider before expanding your small business overseas, some of which were touched upon in the ‘risks’ section above, while others must be considered on a case-by-case basis.

If you haven’t already we would recommend you meet with an International Trade Adviser at UKTI. According to their website you can usually get an appointment with one within just a few weeks. In general, these advisers have all worked at senior levels in international commerce. Quoted from the UKTI website:

”Think of an ITA as a ‘facilitator’ to help you make an honest assessment of the potential of your business to sell overseas. An ITA can also point you in the right direction to take these conversations further.”

Your ITA can work with you on issues such as determining demand for your product or service overseas, researching suppliers, translators, and going through due diligence processes, as well as the helping you to look into tax withholdings and any dual taxation treaty between the UK and the country you’re looking to expand into.

Experienced Tax Accountants

To speak with a professional accountant to discuss the potential tax implications of expanding your small business overseas, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.

Alternatively, if you're just reading our pieces out of curiosity in a bid to broaden your horizons, feel free to have a read of our blog for the latest information on the industry.

Financial Forecasts for Your SME


As a small or medium-sized business (SME) owner, it’s essential that you create financial forecasts for your business so to ensure you have a firm grasp of how your business is performing financially, and thus you are better placed to make business decisions going forward.

There are many types of financial forecasts that you could choose to employ; with the three most significant for SME owners being your sales forecast, profit and loss forecast, and cash flow forecast:

Sales Forecast

Your journey into business forecasting should begin with a basic sales forecast for your company. You can predict your sales revenue for a given month, for example, by multiplying the number of units (products or services) you expect to sell next month by the retail price per unit.

When you perform a sales forecast month after month you’ll begin to notice how accurate your forecasts are compared to your actual sales for the period in question, and adjust your upcoming sales forecasts respectively.

When making your sales forecasts in the very beginning you’ll have to base them on a number of factors, such as your share of the market (local, regional, or global, depending on what you’re selling), and the prices of your products or services compared to your competitors.

Profit and Loss Forecast

One step along from sales forecasting is performing a profit and loss forecast; where you take into account not just your sales, but also the costs (both direct and indirect) you incur in achieving these sales.

These costs will include the cost of sales; which can be everything from the raw materials that are formed into your products, to the monthly salary costs of any employees who work for your business in assembling your products, or performing your services.

Indirect costs are the monthly expenses your business incurs that are not directly related to the products or services you have on sale (you have to pay them, regardless of whether you make any sales that month). These include office/premises rent, utility bills, and general business overheads.

Cash Flow Forecast

Your cash flow forecast is the most complex forecast in this list, yet it’s arguably the most important.

Your cash flow forecast allows you to see when you’re likely to have cash flowing into your business, thus (when compared to when you’ll have a significant number of costs coming out of your business) you’ll be able to see when you’re likely to experience a cash surplus or shortfall, and adjust accordingly.

It’s important that your cash flow forecast paints an honest picture of your business as it stands (and as it’s likely to look in the coming months). For this reason, all sources of income coming into your business should be included in your cash flow forecast, as should all costs, alongside specific dates which detail when payments are likely to come in, and costs are likely to go out.

If you're looking to make progress on the forecasts mentioned above, it would be wise to have a read of some related topics to bring some depth to your knowledge of the financial aspects of business.

Here's some pieces that might help:

SME Taxes You Should Know About

Financing Your Small Business in 2016

Tax Tips and News for 2016

If this isn't enough, there's plenty more information on our blog.

Experienced Accountants

To speak with a professional to discuss your SME’s accounting and forecasting needs, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.