Gone very quiet
Discussion
skwdenyer said:
A993LAD said:
LuckyThirteen said:
After that 6 weeks and VAT is due for many. Straight on the back of wages increases..
I have always been a bit baffled why any firm wouldn't be able to pay its VAT bill.Essentially they are just collecting the VAT from the consumer on behalf of the Taxman. If they then don't have the funds to pass it over to the Taxman it must mean they have spent it. And presumably they don't even have to hand all of it over because they must net off any VAT they have paid as businesses earlier in the VAT chain. Why don't they just keep the VAT to one side when they've collected it from the consumer on the basis that they are going to have to give it to the Taxman later.
If the funds aren't available at the point it's required that just sounds like bad business management if they have spent it on something else so it's hard to have any sympathy for them not being able to afford the VAT when it is due.
That said, a time-to-pay agreement is commonly offered if requested, so not necessarily a cliff-edge problem if it is a one-time issue.
If business is either growing or on an even keel, the VAT in-out is pretty constant and easy to plan. Most small firms end up 'borrowing' the receivable VAT, knowing they will be getting more cash in. When things turn down, it goes wrong - less vat received, as you are selling less, but you might also end up owing more if you cut purchases hard to save cash and, thereby, reduce the paid VAT offset.
The higher VAT is (and it's extremely high right now) the greater the difficulty.
We invoice monthly for annual contracts (posh garden maintenance) and sell a service rather than products. We pay ~£50k each quarter to the VAT man which is a chunk for a small business. It's the end of our period coming up and I usually pay pretty promptly once it's filed.
Do I have £50k spare right now? Nope. I'll have it within a few days of the start of next month. Known, stable revenues each month and VAT quarterly means I only need to have my VAT ducks completely in a row once a quarter. I imagine very few businesses are sitting on their VAT/CT/ENIC in cash - but it can easily be planned for if you know the business. The only thing I put money aside for is the staff bonuses so it's away from the ins and outs.
Do I have £50k spare right now? Nope. I'll have it within a few days of the start of next month. Known, stable revenues each month and VAT quarterly means I only need to have my VAT ducks completely in a row once a quarter. I imagine very few businesses are sitting on their VAT/CT/ENIC in cash - but it can easily be planned for if you know the business. The only thing I put money aside for is the staff bonuses so it's away from the ins and outs.
Edited by 22 on Monday 18th March 09:58
LuckyThirteen said:
To the post above talking about deferred payments: I know of a competitor of mine who is still in a hole having deferred corp and vat during covid and still hasn't caught up.
One in the hospitality trade mentioned above has paid everything on time for 13-15 years but this quarter has tried to move to payment plan - but got told to take a loan out. Another I know had a chunky bill in Jan that basically wiped their account out, but then had a cracking late Feb into March run (no idea why - but was after Valentines Day) although has not replaced a staff member or two who have left.
One does part-accommodation which seems very very strong, food led seems on its arse, and wet led... does that even exist anymore?
robscot said:
One in the hospitality trade mentioned above has paid everything on time for 13-15 years but this quarter has tried to move to payment plan - but got told to take a loan out.
HMRC will always give a payment plan if someone has been compliant in the past. The terms will just depend on the situation.MaxFromage said:
HMRC will always give a payment plan if someone has been compliant in the past. The terms will just depend on the situation.
It might be a case of asking a few times... but this is the second time I have heard that good-VAT-etc payers were told to go get a third party loan at first ask.robscot said:
MaxFromage said:
HMRC will always give a payment plan if someone has been compliant in the past. The terms will just depend on the situation.
It might be a case of asking a few times... but this is the second time I have heard that good-VAT-etc payers were told to go get a third party loan at first ask.
Just a quick update from the world of cleaning
Commercial cleaning - we are noticing that there are a few enquiries floating around, but the price sensitive sector has become even more so. Its the No1 factor in almost all enquiries, above quality or service level. Annoyingly, we are more expensive than others, in order to be able to offer that better service, so we are quiet on the commercial side. I am not too fussed about that at the moment, because:
Domestics - its really busy. We have just put our prices up for April 1st onwards, and existing customers haven't batted an eyelid, seemingly. We are firmly in the top end of the price spectrum for domestic cleaning, but again, this allows us to provide an excellent service.
We're pushing hard into domestics now, streamlining loads of stuff. I have found some fun and interesting ways to handle 90% of the backend admin, which is currently being done by a 20hr a week employee. She is retiring in June and I have no intention of replacing her with another person. I am using the time between now and then to get all teh systems working more and more effectively, and she will slowly ramp down until retirement.
I am feeling positive about things in the domestics - seems that there are still people out there that have spare cash. It just seems like there is a bigger divide than ever between those who have money and those who don't. We are selling more of our higher priced services than ever before, and our lower end stuff less so.
Commercial cleaning - we are noticing that there are a few enquiries floating around, but the price sensitive sector has become even more so. Its the No1 factor in almost all enquiries, above quality or service level. Annoyingly, we are more expensive than others, in order to be able to offer that better service, so we are quiet on the commercial side. I am not too fussed about that at the moment, because:
Domestics - its really busy. We have just put our prices up for April 1st onwards, and existing customers haven't batted an eyelid, seemingly. We are firmly in the top end of the price spectrum for domestic cleaning, but again, this allows us to provide an excellent service.
We're pushing hard into domestics now, streamlining loads of stuff. I have found some fun and interesting ways to handle 90% of the backend admin, which is currently being done by a 20hr a week employee. She is retiring in June and I have no intention of replacing her with another person. I am using the time between now and then to get all teh systems working more and more effectively, and she will slowly ramp down until retirement.
I am feeling positive about things in the domestics - seems that there are still people out there that have spare cash. It just seems like there is a bigger divide than ever between those who have money and those who don't. We are selling more of our higher priced services than ever before, and our lower end stuff less so.
Wing Commander said:
Just a quick update from the world of cleaning
Commercial cleaning - we are noticing that there are a few enquiries floating around, but the price sensitive sector has become even more so. Its the No1 factor in almost all enquiries, above quality or service level. Annoyingly, we are more expensive than others, in order to be able to offer that better service, so we are quiet on the commercial side. I am not too fussed about that at the moment, because:
Domestics - its really busy. We have just put our prices up for April 1st onwards, and existing customers haven't batted an eyelid, seemingly. We are firmly in the top end of the price spectrum for domestic cleaning, but again, this allows us to provide an excellent service.
We're pushing hard into domestics now, streamlining loads of stuff. I have found some fun and interesting ways to handle 90% of the backend admin, which is currently being done by a 20hr a week employee. She is retiring in June and I have no intention of replacing her with another person. I am using the time between now and then to get all teh systems working more and more effectively, and she will slowly ramp down until retirement.
I am feeling positive about things in the domestics - seems that there are still people out there that have spare cash. It just seems like there is a bigger divide than ever between those who have money and those who don't. We are selling more of our higher priced services than ever before, and our lower end stuff less so.
Interesting about the commercial. We looked at changing our office clean because it wasnt to a good standard and we were getting let down regularly, and the next company we spoke to said if we moved to them we would probably end up with the same cleaner, same problems. And the price was thereabouts the same.Commercial cleaning - we are noticing that there are a few enquiries floating around, but the price sensitive sector has become even more so. Its the No1 factor in almost all enquiries, above quality or service level. Annoyingly, we are more expensive than others, in order to be able to offer that better service, so we are quiet on the commercial side. I am not too fussed about that at the moment, because:
Domestics - its really busy. We have just put our prices up for April 1st onwards, and existing customers haven't batted an eyelid, seemingly. We are firmly in the top end of the price spectrum for domestic cleaning, but again, this allows us to provide an excellent service.
We're pushing hard into domestics now, streamlining loads of stuff. I have found some fun and interesting ways to handle 90% of the backend admin, which is currently being done by a 20hr a week employee. She is retiring in June and I have no intention of replacing her with another person. I am using the time between now and then to get all teh systems working more and more effectively, and she will slowly ramp down until retirement.
I am feeling positive about things in the domestics - seems that there are still people out there that have spare cash. It just seems like there is a bigger divide than ever between those who have money and those who don't. We are selling more of our higher priced services than ever before, and our lower end stuff less so.
Wing Commander said:
We have just put our prices up for April 1st onwards, and existing customers haven't batted an eyelid, seemingly
I think people are just so used to prices increasing that they/we just suck it up. Most stuff seems to be +10% today than last year. It's the new norm now. And as you say - the ones with the money are generating more of it, and relatively easily - and they are the ones most likely to want to have/keep luxuries like a cleaner. There's no shortage of money out there whatever any news channel or social media clown tells you.M1AGM said:
Wing Commander said:
Just a quick update from the world of cleaning
Commercial cleaning - we are noticing that there are a few enquiries floating around, but the price sensitive sector has become even more so. Its the No1 factor in almost all enquiries, above quality or service level. Annoyingly, we are more expensive than others, in order to be able to offer that better service, so we are quiet on the commercial side. I am not too fussed about that at the moment, because:
Domestics - its really busy. We have just put our prices up for April 1st onwards, and existing customers haven't batted an eyelid, seemingly. We are firmly in the top end of the price spectrum for domestic cleaning, but again, this allows us to provide an excellent service.
We're pushing hard into domestics now, streamlining loads of stuff. I have found some fun and interesting ways to handle 90% of the backend admin, which is currently being done by a 20hr a week employee. She is retiring in June and I have no intention of replacing her with another person. I am using the time between now and then to get all teh systems working more and more effectively, and she will slowly ramp down until retirement.
I am feeling positive about things in the domestics - seems that there are still people out there that have spare cash. It just seems like there is a bigger divide than ever between those who have money and those who don't. We are selling more of our higher priced services than ever before, and our lower end stuff less so.
Interesting about the commercial. We looked at changing our office clean because it wasnt to a good standard and we were getting let down regularly, and the next company we spoke to said if we moved to them we would probably end up with the same cleaner, same problems. And the price was thereabouts the same.Commercial cleaning - we are noticing that there are a few enquiries floating around, but the price sensitive sector has become even more so. Its the No1 factor in almost all enquiries, above quality or service level. Annoyingly, we are more expensive than others, in order to be able to offer that better service, so we are quiet on the commercial side. I am not too fussed about that at the moment, because:
Domestics - its really busy. We have just put our prices up for April 1st onwards, and existing customers haven't batted an eyelid, seemingly. We are firmly in the top end of the price spectrum for domestic cleaning, but again, this allows us to provide an excellent service.
We're pushing hard into domestics now, streamlining loads of stuff. I have found some fun and interesting ways to handle 90% of the backend admin, which is currently being done by a 20hr a week employee. She is retiring in June and I have no intention of replacing her with another person. I am using the time between now and then to get all teh systems working more and more effectively, and she will slowly ramp down until retirement.
I am feeling positive about things in the domestics - seems that there are still people out there that have spare cash. It just seems like there is a bigger divide than ever between those who have money and those who don't. We are selling more of our higher priced services than ever before, and our lower end stuff less so.
Phooey said:
Wing Commander said:
We have just put our prices up for April 1st onwards, and existing customers haven't batted an eyelid, seemingly
I think people are just so used to prices increasing that they/we just suck it up. Most stuff seems to be +10% today than last year. It's the new norm now. And as you say - the ones with the money are generating more of it, and relatively easily - and they are the ones most likely to want to have/keep luxuries like a cleaner. There's no shortage of money out there whatever any news channel or social media clown tells you.Wing Commander said:
Phooey said:
Wing Commander said:
We have just put our prices up for April 1st onwards, and existing customers haven't batted an eyelid, seemingly
I think people are just so used to prices increasing that they/we just suck it up. Most stuff seems to be +10% today than last year. It's the new norm now. And as you say - the ones with the money are generating more of it, and relatively easily - and they are the ones most likely to want to have/keep luxuries like a cleaner. There's no shortage of money out there whatever any news channel or social media clown tells you.Everything in B2B is still predicated by lowest bid. Compounded by cost out management incentives. It’s a slightly depressing outlook at times, but there actually are clients that want quality- just not so easy to find.
In my own line (engineering) they two decades of ‘cheap from China’ (and India) has given some buyers enough rope to hang themselves. Only gradually do they notice greater failure or wear rates, but it is like the old saying about fooling some people some of the time. On a long enough time line, people come around.
Twenty years in business in a commodified, over supplied market have taught me a few things about pricing. There's always someone cheaper, it's an occupational hazard. Practically all customers expect champagne service at lemonade prices & you have to have the resolve to not buy work, that is a routine temptation in a competitive environment.
Understanding that you are not the supplicant is key to this. Your customer has a problem & you have the solution. Once you grasp that, you're on your way & if your customer doesn't, then they were never sticking around anyway, so no great loss.
Understanding that you are not the supplicant is key to this. Your customer has a problem & you have the solution. Once you grasp that, you're on your way & if your customer doesn't, then they were never sticking around anyway, so no great loss.
President Merkin said:
There's always someone cheaper, it's an occupational hazard. Practically all customers expect champagne service at lemonade prices & you have to have the resolve to not buy work, that is a routine temptation in a competitive environment.
Particularly true in retail... It seems there are a lot more retailers in my market sector (swimming pools) this year... when scanning through doing price comparisons there are a lot of new names and websites out there. We've had a slow March, about £30k down on last year so far, so we need a strong final week of the month. Overall though we're up for the calendar year to date thanks to a strong January and February.
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