Last month we commented on the changes to the Coronavirus Job Retention Scheme (CJRS) that commenced at the beginning of this month (1 July 2020).
Now that we have the option to bring back employees on a part-time basis and still have a measure of support for their unpaid time, what considerations should we consider when planning the effects of the gradual unwinding of the CJRS?
Here are a few issues you may need to consider:
- Based on your present circumstances, what turnover levels are you likely to achieve from the end of this month?
- Apart from staff costs, what are your other fixed cost projections?
- You will need to account for the gradual impact of presently furloughed payroll costs as the CJRS unwinds towards close-down 31 October 2020.
- And last, but not least, have you created formal cash-flow and profit forecasts?
Armed with this information, you can then consider the combination of staffing levels that will allow you to at least breakeven from a profit perspective.
Planning is obviously paramount. If you have your account’s updated in real-time – using cloud-based software – this will provide you with much needed data on which to base your decisions.
The UK economy seems set to break all records for a reduction in output. As the 20% drop in May illustrates, we are descending into uncharted territory.
If you need help creating the necessary “what-if” planning reports, please call. There has never been more pressing need to make informed decisions. Delaying or ignoring this need is rather like driving blind-fold.
If you would like to discuss this article in more depth, please contact DSC Accountants today.