My clients who know me well will be able to visualise me rolling my eyes at this! The truth is there are very few “unexpected expenditures” and in both life and business it is important to be prepared and to plan. I do try and drill this into my clients at every opportunity.
As an individual your tax is always due in January and July and if you trade as a company your corporation tax is always due 9 months and 1 day after the year end. If you get your information into your accountants in a timely manner you will have these bills well in advance. Better still if you keep regular up to date accounts information (such as Cloud accounting) then you can get ongoing up to date financial figures, so you can save as you go.
If you know your chairs are getting old it is likely that they may need repairing and/or you will need to buy new ones. If you have trainee nurses you know you will need to fund their pay rises when they qualify etc. In addition to planning for these types of events businesses should keep a slush fund (working capital) to cover day to day expenses should turnover drop off or expenses increase one month.
There are plenty of funding options available for dentists as it is still a very favourable industry amongst finance providers, from high street banks to alternative providers. However, you will always have the most choice if you go to these finance providers in advance with plenty of notice about how much money you need and why. Giving yourself plenty of time will mean you can consider the offers on the table – even more important now with interest rates increasing.
Admittedly (for those thinking I haven’t answered the question!) there are some unexpected expenditures in life and this is what insurance is for. It is important to review your policies annually – not just the common ones like buildings and car insurance but life insurance, sickness cover, locum cover, tax investigation cover etc. A good financial advisor for any business owner is key to ensure they are correctly protected throughout their careers and beyond.
If you do find yourself in trouble and cashflow is tight please speak to your accountant sooner rather than later as we are usually able to help.
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