The Minimum Wage Rise is coming: Cash Flow Forecasting is as important as ever
- 23rd February 2023
The minimum wage is going up from April 2023, but with many businesses already facing challenges with the recent increases in the cost of living, cash flow forecasting needs to become an essential part of your business.
The Minimum Wage Rise
On 1 April 2023, the government will increase the National Living Wage (NLW) rate for workers aged 23 years and over by 9.7% to £10.42. Other groups, including those under 18 and apprentices will also see their hourly take-home pay increase. This is the largest-ever rise, and while this is great news for workers, the forthcoming increase could see a huge amount of businesses enter in to bankruptcy as they compete with the recent cost of living crisis.
Below are the new rates from April 2023:
- National Living Wage: £10.42, up 92p
- National Minimum Wage, 21 to 22-year-olds: £10.18, up £1
- 18 to 20-year-olds: £7.49, up 66p
- 16 to 17-year-olds: £5.28, up 47p
- Apprentice Rate: £5.28, up 47p
- Accommodation Offset: £9.10, up 40p
The government approved the raise in November 2022 to help businesses recruit and retain staff, and to support workers with rising bills and prices. However with a growing number of companies facing insolvency, cash flow forecasting is an integral process that will help many businesses understand their future financial position.
Cash Flow Forecasting
Cash flow forecasting is a simple process to explain and it is where an accountant can estimate the amount and timing of cash inflows and outflows for a business over a specific period of time. As accountants, we offer specialist expertise when it comes to supporting businesses with their cash flow forecasting so owners can better understand how increases in such areas like the National Minimum Wage will affect them and their business.
How we can help
- Our experts understand that cash flow forecasting is important for businesses because it allows them to identify potential cash shortages or surpluses in advance. Our accountants can advise businesses on how to take the necessary steps to manage their cash flow accordingly so they can plan ahead.
- When creating a cash flow forecast, we also help businesses to be as accurate as possible. This means we help you to use realistic estimates and support you in adjusting your cash flow forecast as new information becomes available.
- We also offer support and advice in contingency planning. In this instance, this is where actual cash flows differ from the forecasted amounts, meaning we can provide support on the steps your business should take should this situation arise.
Do you need support with your cash flow forecasting? If so, contact Forrester Boyd today to find out more about how we can help you Email us or call one of our offices.
All data and figures referred to in our news section are correct at the date of publishing and should not be relied upon as still current.