The importance of cash flow for tourism businesses

With the busy Christmas period approaching, businesses operating in the hospitality and tourism sector will be dealing with increased demand.

Now more than ever, it is important to ensure your cash flow is as strong as it can be.

What are the basics?

When it comes to running a business, having a solid cash flow is vital. However, poor cash flow is one of the top reasons that tourism businesses shut down.

It’s a straightforward concept, balancing cash coming into the business against cash going out – inflow and outflow.

Inflow into the business can be defined as the payments received from customers for food and drink, but can also cover finance and borrowings.

Outflows are more complicated and cover costs like rent, rising utility bills, payroll and produce suppliers, not forgetting general maintenance and repair costs for the premises.

That is where the latest technology can make life easier by keeping track of day-to-day costs as well as often being compatible with the software used by their accountants.

Forecasting is key

With analysis from a point-of-sale system, businesses should be able to project cash flow for the year ahead.

Comparing data from the previous year will show the highs and lows of performance and allow planning for seasonal fluctuations.

Cut back when needed

If you are behind your forecast, action needs to be taken to reduce costs.

This could include cutting back where necessary and trimming menus, including the least popular dishes, and closing early when trade is slow to make energy and payroll savings.

Let your cash do the talking

Rather than taking stock on credit, for example, talk to your vendors about a discount on your orders if you pay in full, upfront.

A bulk cash order could persuade them to cut prices as they also have to think of cash flow.

Get the paperwork in order

The numbers and paperwork you face may seem daunting and complex, but that is where your accountant can help.

We can advise on cash flow, ensuring that your books are up to date so that you do not fall foul of any tax issues.

Need help with cash flow in the tourism sector? Contact us today.

Blog right caret

Adapting your business plan for the summer


Tax implications to consider for business owners when paying themselves 


Research and Development tax relief changes 


Business right caret

Small business confidence dips ahead of new customs controls coming into force

Four in 10 exporters have reported a fall in international sales since the end of the Brexit transition period, a major study has revealed. According to the tracker, four in 10 – around 41 per cent of traders – have reported a “drop off” in international sales in the three months to September 2021.


Large number of businesses looking to recruit more staff

It is perhaps a sign of confidence returning to the UK economy that a significant number of British businesses believe they will be recruiting staff over the coming year.


Spring Statement 2022 summary

Mr Sunak found himself addressing MPs against a background of crisis, with the residual impact of COVID, the invasion of Ukraine and the cost-of-living crisis all affecting the economy in different ways.


Cloud right caret

Cloud-powered accounting: Advancing beyond traditional cloud accounting systems


Compliance right caret

HMRC asks sole traders to correctly report SEISS grants or “repay in full”

Sole traders who have not correctly reported their Self Employment Income Support Scheme (SEISS) grants may be forced to repay them in full, it has been warned.


Making Tax Digital – what you need to know ahead of 2022-23

From April 2022 all VAT-registered businesses need to comply with MTD for VAT. MTD applies to taxpayers who file Income Tax Self Assessments for business or property income of more than £10,000


Real-time online sanctions tracker to assist importers and exporters

Any business involved in international trade, whether importing, exporting or part of the supply chain supply to those firms, is faced with a rapidly changing regulatory environment.


Economy right caret

Small businesses call for Government support to tackle climate change

According to new research, many are addressing energy usage, increasing recycling and investing in microgeneration, but only a third of those have a formal plan to tackle climate change within their business.


Hospitality bosses develop new strategies to cope with staff shortages

Hospitality business owners have responded positively to the staff shortages caused by the pandemic, by increasing wages and implementing improved staff retention strategies.


Everything you need to know about the new WTO Services Domestic Regulation

New World Trade Organisation (WTO) rules are set to cut the cost of global trade by billions of pounds every year, it has been announced.


SME right caret

Adapting your business plan for the summer


Research and Development tax relief changes 


Late payments – why they are so damaging to small businesses and how to deal with them


Tax right caret

Understanding tax obligations for charities


Navigating estate planning and Inheritance Tax: what you need to know


Tax considerations for small business owners: Sole traders vs limited companies 


Tax Planning right caret

Almost 800,000 tax scams reported to HMRC in past 12 months, figures reveal

Nearly 800,000 tax-related scams were reported to HM Revenue & Customs (HMRC) in the past 12 months, a major study has revealed. According to the report, HMRC responded to 797,010 referrals of suspicious contact from the public in the last year. Around 358,000 of these involved scams where taxpayers were offered bogus tax rebates.

Tax Planning

Be aware of tax liabilities if you are using cryptocurrencies

For those who have dabbled in the market, its important for them to understand that there may be tax liabilities with Captial Gains Tax and Income Tax, with any transactions whether with currency or other crypto assets.

Tax Planning

Did you use a Bounce Back Loan to cover personal expenses during the pandemic? Act now to avoid tax consequences

If you received a Bounce Back Loan (BBL) during the coronavirus pandemic and took the cash as drawings, there may be additional tax consequences.

Tax Planning