The cost of living crisis has been making headlines for many months now as prices of many different commodities skyrocket.
Following a challenging few years due to the COVID-19 pandemic, businesses are arguably well accustomed to dealing with a wide variety of issues. But with a great deal of uncertainty as to just how high costs may go, and when the crisis might abate, companies are looking ahead at what this could mean for them.
So how is the cost of living crisis impacting businesses in the UK? How are businesses responding? And where are they finding support? We take a look below…
Supply costs increasing
According to research, nine out of ten small businesses are reporting higher costs, particularly costs for suppliers and the purchase of stock. With fuel prices also on the rise (although this had dipped slightly in recent weeks), not to mention gas and electric, businesses are most certainly feeling the squeeze in their cash flow.
Pay increases for staff
With many individuals also feeling the pressure of rising costs, many employers are providing pay increases to their staff. In addition, from 6th November, National Insurance contributions will change once again by reversing the Social Care Levy payment of 1.25% that was introduced earlier this year, this means that income will rise for all those eligible to pay NI.
Support from the government
Despite a rather turbulent few months in British politics there is indeed support in place for businesses to ease the pressure. The Energy Bill Relief Scheme is providing businesses with deductions on their energy bills until 31st March 2023. You can read more about the scheme here.
Here at Zodeq we are, of course, huge advocates of invoice finance, as this can make a significant difference when looking to maintain your cash flow throughout the month. Invoice finance will allow you to release a percentage of cash from an invoice as soon as it is raised and sent to a client; this means that you will have vital working capital throughout the month as you await payment from customers (typically 30-60 days).
As we have seen over the past few years, the business world has the ability to tackle these challenges and come through the other side with the right support in place.
If you are looking for business support, whether that be invoice finance or back-office administration, contact the Zodeq team today!