Understanding your finances

The details in the Business Health Check are confidential but can be a useful starting point for discussions.

Business Healthcheck

Here are some things you may wish to think about to ease your financial worries and you may also wish to speak to your Relationship Manager who will be happy to work with you to identify options that may help your specific circumstances.

Balancing the books

If the financial questionnaire indicated that your income is greater than your expenditure but you feel you are having trouble balancing your money this may be linked to the timing of payments leaving your account.

You may wish to consider:

• Whether you can set-up new standing orders or direct debits to just after you receive your income to avoid incurring late payment charges, and whether moving some current payments back a few days may also be helpful. This can usually be done through a quick phone call with the companies involved.
• Using internet banking to enable you to see both your available and forecast balance, and to easily make any payments to avoid incurring charges. You can also set up text alerts to let you know when your balance drops below a certain amount.
• Whether you can adjust payment terms with your customers and suppliers to improve your cash flow
• If you have too much money tied up in stock that could be released.
• Whether there are any lease breaks that you could take advantage of for buildings or other assets.

If your expenditure is greater than your income you should look at your flexible monthly costs to determine whether you can reduce your spending.

Spending and travel

• If you plan your spending and work to a budget, you’re less likely to make impulse buys or spend more than you want to. Use your sales forecast to determine what monies you have available.
• Review your travel costs to see if there is a cheaper option, such as monthly bus or rail card. Optimise your business logistics, possibly combining deliveries.
• If it makes financial sense, cancel any mobile phone contracts and start using a pay-as-you-go option. With a pay-as-you-go phone you can control how much you spend more easily.
• Alongside any reduction in the flexible monthly costs a review of the fixed monthly expenditure should take place.

Utilities

• If you wish to stay with your current provider, you may be able to save money by paying by direct debit. If you have gas and electricity from the same supplier, you could get a dual fuel discount. Contact your supplier to see if that’s available to you.
• Consider reducing your energy consumption. There are many ways to do this, such as using loft and cavity wall insulation. Visit Energy Saving Trust, (opens in a new window).

Increasing your income

Here are a few other things to consider:

• Are all your products profitable or should you focus on a sub-set of products only?
• Do you have unwanted assets you could sell?
• Are your business product price points correct and can your product be used in a different market or environment?
• Have you discussed options with other professionals in or related to your industry?

You may want to think about reviewing your budget to help you understand your finances better. ( Budget planner tool ) , (opens in a new window). To many the word 'budget' can be seen to mean spending less, but, in fact, it means spending smarter. Think of a budget planner as a tool that allows you to prioritise your spending to ensure you have enough for the essentials whilst saving for the 'nice to haves' or clearing any overdue payments you may have.

Budget planner tool, (opens in a new window)

Alternatively call our Financial Care team on 0800 141 2261 and they will be happy to work with you to identify options that may help your specific circumstances.

You may also wish to find out what benefits you may qualify for using a benefits calculator on www.gov.uk/benefits-calculators, (opens in a new window) or www.turn2us.org.uk, (opens in a new window)

Balancing the books

If the budget planner indicates that your income is greater than your expenditure, but you are having trouble balancing your money this may be linked to the timing of payments leaving your account.

You may wish to consider:

• Whether you can set-up new standing orders or direct debits to just after you receive your income to avoid late payment charges, and whether moving some current payments back a few days may also be helpful. This can usually be done through a quick phone call with the companies involved.
• Using internet banking to see both your available and forecast balance, and to easily make any payments to avoid incurring charges. You can also set up text alerts to let you know when your balance drops below a certain amount.

If your expenditure is greater than your income you should look at the flexible monthly costs section and determine whether you can reduce your spending.

Credit card

• If you have a credit card, it is recommended that you pay more than double the interest and fees generated each month to ensure you are reducing the balance steadily. You can find an appropriate amount to pay and see how increasing this amount, if you can, will be of benefit to you at the Money Advice Service, (opens in a new window).
• You may have received a letter advising you to increase your credit card payments. Direct debit is the easiest way to manage your credit card payments. You can contact us to discuss this at any time by calling 0800 678 3320.
• You can also make increased or additional payments towards your balance at any time using the following options:
• Online banking
• Telephone banking
• In branch
• Increasing your payments and limiting the use of your credit card will help to reduce the interest paid, the amount owed and the time taken to pay it off.

Shopping and travel

• If you plan your shopping and work to a budget, you’re less likely to make impulse buys or spend more than you want to. Make a shopping list and stick to it.
• Consider swapping to cheaper brands or supermarket own-label brands of essential foods that offer better value.
• Look out for special offers, keep coupons and remember to use them.
• Consider whether a monthly bus or rail card would be better value or if you are able to car share to reduce fuel costs.

Telephone and internet

Review your package to make sure that it offers the best value available. Check with your current provider, shop around or use comparison sites. Here are a few ideas for cutting costs:

• Change to a combined phone, TV and broadband package. Bundling all three together usually results in a better deal.
• Think carefully about what you really need. If you can live without those extra TV channels, for example, you can make substantial savings.
• If it makes financial sense, cancel your mobile phone contract and start using a pay-as-you-go phone. With a pay-as-you-go phone you can control how much you spend more easily.

Gas and electricity

• Most companies offer a discount for paying by direct debit. Or if you have gas and electricity from the same supplier, you could get a dual-fuel discount. Contact your supplier to see if that’s available to you.
• Consider reducing your energy consumption. There are many ways you can do this, such as using loft and cavity wall insulation. There might be offers available. Visit Energy Saving Trust, (opens in a new window).

Water

• If you’re a low water user, it might be cheaper to have a water meter fitted. There are also water-saving devices that can be used in the home. Contact your water company to find out more.

Increasing your income

Finding ways to boost your income is not easy. If you’re already in work, could you increase your hours or take on a second job?

Here are a few other things to consider:

• Could you get a friend to move in and share the bills?
• Do you have unwanted items you could sell?

Find out what benefits you might qualify for using a benefits calculator on www.gov.uk/benefits-calculators, (opens in a new window) or www.turn2us.org.uk, (opens in a new window)

Remember we are here to help, our financial care team is experienced in providing support to customers who have financial worries and will work with you to identify options that are tailored to your specific circumstances. Please call one of the team on 0800 141 2261