business-2-en-gbBusiness, Enterprise

What does 2023 hold? The key trends CFOs must watch out for in the coming year

27 January 2023   |   10 minutes read
CFO planning for 2023 business trends with his team.

From rising costs to continued economic uncertainty, 2023 has the makings of a turbulent year for businesses. But while the next 12 months will undoubtedly be challenging, there are also exciting opportunities ahead. In this post, we’ll look at the key 2023 business trends that should be at the top of every CFO’s mind.

And while nothing about the future is certain (especially not this year), it’s possible to divine a likely course of events. So let’s nail our colours to the mast, and make some predictions about how these trends will play out. 

Navigating a rocky landscape

So, what’s keeping CFOs up at night as we head into 2023? Without a doubt, the state of the world economy is at the top of the list. In the UK at least, it looks like a recession has been staved off (for now). But economic uncertainty still abounds.

75% of the 650 finance executives who participated in an October 2022 survey singled out economic disruption as “2023’s biggest challenge.” And 96% said the looming recession would affect business in some way. 

Jitesh Patel, Soldo’s Accounts Payable Manager, says the rocky economic landscape is likely to create a double-whammy. 

“With the cost of living going up,” he says, “lots of employees will be asking for raises. That’s to be expected.

“But businesses will also be dealing with many of the same pressures their staff are — skyrocketing energy bills, increases in the prices of raw materials and suppliers’ fees, rising rents. The list goes on.”

In this kind of scenario, the knee-jerk reaction is to tighten the purse strings. But, cutting budgets too much risks being counterproductive. 

Campbell Harvey, a finance professor at Duke University, puts it this way: “You might emerge in seemingly good shape, but your competitive positions can be damaged because you’ve done things to sacrifice long-term value creation.” 

The upshot is that, while caution and, yes, some cost-cutting are inevitable, there’s a balance to be struck. 

“You need to determine what your goals are,” Patel continues, “then work out a compromise you can live with, whether it’s putting a non-critical project on hold or raising more capital through an investment round.

“Ultimately, all businesses need money to keep going. If you want to grow, you have to spend extra cash. Equally, if your goal is to stay afloat, you have to work out the bare minimum required to do that.”

Getting to grips with automation

One area that’s unlikely to see budgets shrink in 2023 is technology, particularly automation. A Gartner survey found that 78% of CFOs will either allocate as much budget for technology as they did in 2022 or increase spending, even if the cost of living continues to go up. 

Given the cost-savings automation can make, this stands to reason. 

“In previous roles,’ says Patel, ‘I had up to 15 people doing payroll. Now I need a fraction of that number, even though the workload is broadly similar. The same goes with bookkeeping. Modern software links to your bank account and automatically categorises transactions, so there’s much less manual work.”

As far back as 2016, 65% of employees worried technology would make them redundant. The difficult economic climate in 2023 will likely heighten this fear and make employees more reluctant to engage with digital transformation projects. 

As a result, dialogue will be more important than ever. 

Research suggests that, far from having their fears confirmed, employees who use automation are happier at work and more optimistic about their career prospects. But, for the transition to succeed, you need to address people’s concerns head-on and make them feel like they have a say in the process. 

On our podcast, The CFO Playbook, Enable’s Nick Rose put it this way: “To make technology stick, you need to bring people with you.” 

Once they’re convinced technology will make their job less frustrating and more satisfying, rather than replace them, they’re more likely to buy into it and engage with the process. 

The push towards greater sustainability

With less money to spend, both individuals and business customers are becoming more discerning about who they buy from. And, increasingly, one of the key metrics they consider is sustainability. 

70% of UK customers already assess businesses’ sustainability credentials before taking out their wallets. No surprise then, that ESG initiatives are high on CFOs’ agendas, with 48% planning to invest more money in them regardless of inflation. 

Needless to say, the benefits of running a business more sustainably go well beyond attracting the growing number of environmentally-conscious consumers. 

For starters, there’s a strong moral imperative. In the face of a worsening climate crisis, we owe it to ourselves and future generations to minimise our impact on the planet. 

Studies also suggest that businesses that score high on sustainability metrics have more loyal employees, lower costs, and typically outperform the market in the medium to long term

Sarah Reay, a climate change executive at ICAEW — the Institute of Chartered Accountants in England and Wales — says that CFOs are ideally placed to take ownership of the process and make sustainability integral to decision-making across the organisations they work for. 

But, for change to be truly meaningful, they’ll have to overcome two challenges over the coming months and years. 

First, while some jurisdictions — the EU, for instance — are making an effort to standardise ESG reporting, frameworks vary quite widely. 

The inconsistencies between frameworks can make it hard to gauge whether a specific initiative is actually effective, or even to know what sustainability information to communicate to stakeholders. 

Second, making your business more environmentally and socially responsible comes with a number of practical difficulties. 

Case in point, Jitesh Patel observes, electric cars have prohibitively high upfront costs compared to diesel and petrol, so switching your entire fleet may not be financially feasible, particularly right now. 

Plus, how do you make sure you compensate employees fairly if they charge their electric company car at home?

Looking ahead: flexibility is the name of the game in 2023

“I think everyone knows that 2023 is going to be tough,” says Patel. “Even just looking at overheads, they’re only going to go one way: up.

“The flipside is that these things are cyclical. If you look at historical data, there’s a recession every twelve years or so. And, yes, some businesses don’t make it. But those that find a way to stay relevant emerge in a stronger position than they were in before.”

If you’re a CFO, this means being able to adapt quickly to change will be more important than ever.

“Visibility is going to be key,” concludes Patel. “You need to be aware of everything that’s going on in the business and question anything that doesn’t look quite right. It’s going to be a critical year for finance as a strategic function, that’s for sure.”

Visit our blog for more articles like this one or subscribe to get them direct to your inbox. Find the right Soldo plan for your business here.

Related posts

business-2-en-gbBusiness, Enterprise, Accounting Tips, Business, Finance, Scale-up advice

Business software: five benefits companies can’t afford to miss out on

27 January 2023   |   9 minutes read
Business software

Business software solutions are now a vital part of the management and everyday operations of both growing and established organisations. Software can help streamline operations, automate your processes, reduce costs and give you deeper insights into your data. All benefits that have the potential to give businesses a stronger competitive edge in the market.

So let’s explore the benefits of using business software to drive success. We’ll cover:

Increased efficiency and productivity

Automation is the key to running a lean and efficient business. If there are tasks and processes that can be automated, this has the potential to transform your operational performance.

Automated systems perform faster and more accurately than manual ones. Automation is also better at completing complex tasks with minimal effort, reducing time, effort and cost. For example, you might use a digital payment gateway like Stripe to automatically reconcile your incoming payments with your finance system. Or you could use a voice AI assistant like Curious Thing to automate your tier 1 customer helpline and answer basic queries.

By working business software into every area of the organisation, you can increase your overall efficiency. You also free up resources and people, so they focus on other activities. With time-consuming manual tasks removed, your team can concentrate on higher-value tasks that require specialised skills, deeper expertise or human creativity.

Improved access to data and collaboration tools

Large or complex organisations generate untold amounts of data. But are you maximising it to help your decision-making? Business software solutions make it much easier to analyse this important data.

Let’s take your finance software as a starting point. Your finance platform records every expense, every sale and every transaction that goes on in the business. A cloud accounting platform, like Exact Online, can help you sift through this financial data to give you improved access to vital information. For example, you could monitor:

  • The company’s cash flow position and how much cash will be available in future periods
  • The profit and loss position and where the business is generating revenues
  • Which products are delivering the best margins and overall profits
  • Which branches or offices are spending the most on ad-hoc expenses

Having access to this data and management information in the cloud also makes it easier for teams to collaborate. Regardless of your location or your current workspace, the whole team and any key business advisers have 24/7 access to the relevant numbers online.

You’re always working on the same documents, the same reports and the same figures – removing the potential for confusion around document versions and data periods.

Business software that integrates with your finance platform

Enterprise resource planning (ERP) solutions help you manage every element of your data and resources. In the same way that cloud accounting provides you with deep data on your finances, this kind of business software gives a comprehensive overview of every element of your operations.

Your solution can offer you management information, financial breakdowns, supply chain management, customer relationship management and more. ERP solutions can also automatically track and report on the most important key performance indicators (KPIs) for each operational area. These metrics can be used to track progress and identify areas for improvement.

With all this information at their fingertips, companies have real-time access to the patterns, trends and drilled-down insights in their data. This gives the relevant stakeholders the specific information they need to make decisions that are well-informed, fast and based on clear, unbiased evidence.

Cost-savings and improved control over spending

Running a business is costly. Money flows out of the company on labour costs, utilities, IT infrastructure and investment in key assets and pieces of equipment. But business software can help manage these costs and identify opportunities to make a saving.

Using software automation and digital assistants helps reduce the labour costs associated with data-entry tasks and other manual operational processes. Cloud-hosted business software also eliminates the need for costly hardware investments. With all the software applications, data and documentation held securely in the cloud, there’s no need for expensive servers, storage systems, IT infrastructure and so on.

Expense management software like Soldo, which comes with connected company cards, also makes it much easier to manage your everyday costs and business spending. Employees can use plastic or virtual cards to cover their work-related expenses as well as to purchase essential equipment, supplies or services using company money. With spend limits on each card, and online reporting of all spending, the business is always in complete control of those costs.

How business software gives you the competitive edge

Business software, apps and integrations are evolving faster than ever before. And the sooner you embrace the benefits and opportunities they deliver, the bigger the return on your investment will be. If organisations want a clear competitive advantage, this is the way to do it.

Finding the most effective software tools for each area of the business makes good sense. With a business software platform at the centre of your app stack, you have the option to add your own choice of additional software modules, third-party apps and legacy solutions.

Adding your own custom stack of business solutions is one of the most effective ways to streamline operations and reduce costs. It’s also a proactive way to boost efficiency, increase access to data and make it easier for departments and teams to collaborate.

By investing in a reliable business software platform, management teams can make sure that the company remains competitive and productive – while saving time, effort and money.

Visit our blog for more articles like this one or subscribe to get them direct to your inbox. Find the right Soldo plan for your business here.

Related posts

business-2-en-gbBusiness, Enterprise, Accounting Tips, Business, Finance, Scale-up advice, Business, Finance, Scale-up advice

Three tools to help scale-ups manage burn rate

25 January 2023   |   14 minutes read
Burn rate

For high-growth businesses, knowing how to manage burn rate is essential. With the right digital tools, you can have complete control and visibility of your cash flow and employee spending, reduce your Days Sales Outstanding (DSO), and forecast more accurately.

In this article, we’ll look at three kinds of software that can help you extend your cash runway while you scale. Here’s what we’ll cover:

What is cash burn rate and how is it calculated?

Burn rate, or the rate at which a company spends its initial capital, is a sensitive topic in the scale-up community because of how difficult it is to manage.

As a measure of negative cash flow, scale-ups and investors use it to track monthly the amount of cash that a company spends before generating its own income.

It’s also a way to find out how much time the company has before it runs out of money – its runway, which is calculated by dividing what’s in the bank by what is spent each month.

If you have £1,000,000 and you’re spending £100,000 each month, your runway is the result of that division (10 months), so your burn rate is £100,000.

Burning cash too fast can result in a company going out of business – generating profit from sales or revenue may take years, and staying afloat will depend on the amount of cash available to cover expenses.

On the other hand, burning cash too slowly can be a sign that the company isn’t focused on investing in its future, which might make it fall behind the competition.

For these reasons, investors make a point to monitor a company’s available cash, expenditures and cash flow burn rate before deciding to invest.

Showing investors that you know how to manage cash and burn rate gives them the confidence and trust to back the business – but what worked in the past won’t necessarily work now.

What are the best strategies modern for managing burn rate?

Traditional advice given to companies looking to reduce their cash burn rate included taking drastic measures, such as:

  • Lay-offs and employee pay cuts, while also holding off on hiring
  • Selling company assets, such as vehicles or office equipment
  • Increasing sources of income
  • Issuing debt or equity

The problem is that most of these measures are undesirable under normal circumstances, and typically come off as desperate attempts to earn more time – rather than set up companies for future growth.

They may, in fact, get in the way of growth.

Instead of making hasty decisions as a reaction to cash movement, it’s better to be proactive and develop a strategy geared towards cost control, raising income, and maintaining a positive cash flow.

But you and your team don’t have to carry the full weight of this on your shoulders anymore.

Modern financial technology can help you get more done, for less money, and more quickly. There are plenty of useful and accessible services out there ready to make everyone’s life easier and have the results to show for it.

We put together a small list of digital tools for monitoring, analysing and controlling cash burn rate, and why they’re the extra push high-growth companies need.

All three are loved by their customers and highly rated on software review site G2. Their seamless integrations with top accounting and ERP software also make their implementation a breeze.

Three digital tools to help you extend your cash runway

1. Gaviti

Gaviti is a software designed to help users get paid accurately and on time. Its comprehensive arsenal of features help you and your team stay on top of receivables, track open invoices and set payment reminders for their clients. Gaviti is particularly popular among scale-ups working in wholesale and distribution, manufacturing, transportation and logistics, business services and technology.

This platform simplifies the entire collections process and comes with benefits that have a direct impact on burn-rate management, including:

  • Accelerating cash flow
  • Reducing DSO by 30%
  • Ensuring users get paid faster without wasting time, resources and energy chasing clients or carrying out manual processes

On top of this, Gaviti’s intuitive dashboard shows an overview of your company’s accounts receivables (AR) and automatically sends you a summary of them via email so you’re always on top of any changes.

For busy finance teams, the visibility that Gaviti offers into AR – which can be detailed and focused on specific customers – and the timely reminders can be invaluable.

Reducing DSO during a difficult period, especially as we continue to navigate through a recession and cost of living crisis, gives you the leeway to invest and spend when you need to, and not a moment too late.

Integrations: Gaviti supports all Enterprise Resource Planning (ERP) systems (e.g. SAP, QuickBooks, Priority ERP, NetSuite), including custom accounting or ERP software.

What users love about Gaviti:

‘I no longer have to spend hours per week crunching the numbers to see where my cash is. Reports are there, waiting for me in Gaviti. For the most part, I don’t even think about collections. It just happens.’ – Krista Lewis, Director of Finance and Accounting, Vernovis

2. Soldo

Knowing when and what to spend on isn’t always clear for finance leaders in rapidly growing businesses.

For scale-ups looking to raise funds, budgeting in advance is a way to avoid the burn rate panic that brings on knee-jerk measures – but they also need the flexibility and freedom to adjust spending controls.

Soldo combines prepaid company cards with a flexible spend and expense management platform. You can assign cards to all employees, who will use them for expenses and company spending once you top up the amount you want to allocate.

Unlike credit or debit cards, Soldo comes with a range of features to help you track spending – such as full reports and instant notifications – and define spend limits as you see fit, with only a few clicks.

These controls, along with the rich insights Soldo offers, help high-growth companies manage burn rate by:

Soldo also makes receipt capturing and sharing transaction information a cinch – employees can upload receipts at the point of purchase and send them via the mobile app. After that, sharing receipts with your accounting system takes one click.

The control and insight you get into how you’re spending helps you to identify overspending, cost-cutting opportunities, and learn where to spend and not to spend – tackling burn rate and boosting investors’ confidence.

Integrations: You can connect Soldo with Sage, Xero, QuickBooks and NetSuite to eliminate expense claims, manual receipt processing, and payment claims. Integrating Soldo with your accounting software gives you and your team a complete, real-time overview of company spending, as expense data is automatically shared daily.

What users love about Soldo:

‘One of the struggles we’re having is to put in controls at the same time that the business is growing. Soldo lets us do that by helping us get a grip on exactly where we are with spend.’ – Jamie Clark, Senior Financial Accountant, Farmdrop

Book a demo to find out more about Soldo or get started now by choosing the right plan for your business.

3. Float

If you really want to stay on top of your cash flow, get Float.

This cash flow forecasting app helps companies project their cash in the bank and gives them a real-time view of cash flow.

Float’s forecasting, budgeting,and reporting features help you unlock actionable insights and make better decisions to bring your team closer to big goals.

Burn-rate management is a big part of Float’s purpose, which the platform supports by:

  • Planning and analysing runway, burn rate and churn
  • Offering future cash flow projections
  • Providing a daily, weekly, or monthly view of cash flow
  • Breaking down invoices and bills for granular detail of income and outgoings
  • Gathering live data from accounting systems automatically and creating an ongoing, rolling, accurate forecast

After some serious investment in growth, businesses tend to cut back costs, become conservative, or make hasty decisions. Float helps you decide which bills to pay and which to delay, tells you how much you can afford to spend on specific areas of the business, and helps you plan for the ‘what-ifs’.

It shows you exactly what you need to pay attention to the most while your business is growing.

Integrations: Float integrates with QuickBooks, FreeAgent and Xero and pulls real-time data directly from them so you don’t have to create any more spreadsheet-based forecasts. This saves teams significant time and prevents manual errors, taking the guesswork out of managing cash.

What customers love about Float:

‘Float is fluid and flexible, which is amazing. I really value it. I can see everything I need to immediately, and in that way it gives me so much confidence in where we are as a business.’ – Jacob Hill, Managing Director, Offplay

Go digital and keep moving forward

These exceptional tools won’t just suit your business during periods of rapid growth – their high scalability means they’ll grow with the business and remain useful long after burn rate drops off your list of concerns.

They’ll save you time and money in the long run, provide valuable financial insight and ensure the company’s cash flow stays healthy.

It’s full steam ahead from now on.

Subscribe to our mailing list for more articles like this one, straight to your inbox.

Related posts

business-2-en-gbBusiness, Enterprise, Accounting Tips, Business, Finance, Scale-up advice, Business, Finance, Scale-up advice, Business

Key dates for accountants in business –  2023

19 January 2023   |   7 minutes read
Key dates for 2023 being planned out

While many key workflows for accountants in business can be automated, you need to be aware of the key dates related for 2023 related to filing deadlines and tax changes.

Planning is critical. Missing deadlines and paying incorrect values can result in the business receiving fines and needing to undertake time-consuming admin. This can impact the resourcing of your teams and have a knock-on effect on producing accurate forward-looking forecasts.

Due to the incoming recession, making agile decisions based on accurate data is more critical than ever. Don’t accrue deadlines and fines and schedule tasks for teams in advance by following our key dates for the year ahead.

January

1 January – Introduction of new HMRC penalties regime

HMRC’s penalties regime will undergo a drastic overhaul, with it initially being phased in for VAT.

Changes are planned to make compliance easier, with fines being proportionate for non-compliance. For the first time, VAT filings and payments will be treated separately.

Read about it in more detail in our blog post.

March

15 March – Spring Budget

At the end of 2022, the date of the Spring Budget was revealed. The announcement will be accompanied by an assessment of the government’s tax and spending plans by the Office for Budget Responsibility.

This is likely to be the major fiscal event of 2023, with a number of new tax changes and policies announced at short notice for 2023/24. As well as tax years ahead.

April

1 April – Increase to the National Living Wage

To help the lowest-paid workers, the National Living Wage will rise to £10.42, an increase of 92p year on year. This will apply to all employees 23 and over.

While this is the bare minimum related workers should be paid, you may choose to set higher minimum thresholds to attract and retain entry-level staff.

1 April – Diverted Profits Tax increase

The diverted profits tax will increase from 25% to 31%.

If you are a large international company with businesses in the UK, you will need to consider this change and tweak your global operations to optimise tax planning.

1 April – Corporation Tax increase

Corporation tax will increase from 19% to 25% for companies making more than £250,000 in profits. If your year-end falls on a date other than 31 March, you will have to pro-rate your corporation tax calculation.

6 April – Changes to Van, Car and Fuel Benefit Charges

The flat-rate van benefit charge will increase to £3,600. Additionally, the car fuel benefit multiplier will rise to £25,300 and the flat-rate van fuel benefit charge will increase to £688.

Changes are being introduced to match increases from the Consumer Price Index. These changes will affect you if you provide employees with company vans available for private use or provide them with fuel for private mileage.

May

31 May – P60 Filings

By 31 May, you’ll need to issue employees with a P60 form for the tax year ending 5 April 2023. This will detail how much individuals have earned over the tax year and how much they have paid.

Forms won’t have to be issued for employees who departed before 5 April 2023.

July

5 July – Deadline for applying for PAYE settlements

PAYE Settlement Agreements (PSA) allow you to make one annual payment to cover all the taxes and National Insurance related to minor and irregular employee benefits.

Agreements save time by foregoing the need to put these costs through payroll. If you apply for a PSA for the 2021/22 tax-year, you’ll need to do so by 5 July.

6 July – P11D filings

P11D forms detail employee expenses or benefits and will show you related liabilities for Class 1A National Insurance.

While PSAs can lessen the workload on details to include, you’ll still need to include benefits, including childcare, company cars, health insurance and entertainment.

If you don’t file on time, you’ll receive a penalty of £100 per 50 employees for each month the deadline is missed. You’ll also be charged a penalty and interest for late payments.

Filing deadlines specific to you

Alongside dates that affect all companies, you’ll also have your own filing and payment deadlines for VAT, annual accounts, and corporation tax, so mark these in your teams’ calendars now.

Related posts

business-2-en-gbBusiness, Enterprise, Accounting Tips, Business, Finance, Scale-up advice, Business, Finance, Scale-up advice, Business, Business

The automation checklist for 2023

17 January 2023   |   9 minutes read
Team discussing finance automation

Given the mass adoption of cloud accounting software, you are likely to be already using several finance automation features. Whether that’s related to bookkeeping or VAT returns filings (among other things).

However, are you pushing automation to the limit in your company? Doing so can help streamline processes, save time and allow better strategic decisions in today’s unpredictable economy.

Cloud vendors have several automation features you may not be aware of, such as fixed asset register maintenance and the option to post recurring journals.

Additionally, the automation capabilities of cloud accounting software can be furthered through third-party integrations. This includes group consolidations, inventory management, spend management and payroll.

An emerging new category is tools that automate intercompany recharges for group companies. These can save significant time at month end for large companies.

Review our checklist below to ensure you have all the vitals covered.

Push core cloud accounting software to the limit

If you’re using cloud accounting software such as Xero, QuickBooks, Sage or Netsuite, you’ll already be taking advantage of automation features related to bookkeeping. However, you may be missing out on incorporating automation features less apparent.

For example, month-end processes can be streamlined by automating admin-heavy workflows such as fixed asset registers and recurring journals.

Fixed asset registers take time and effort to maintain. It can be challenging to track whether assets have been fully written off and if consistent depreciation methods have been applied.

Most cloud vendors have fixed asset registers that allow you to log all items and set up a universal depreciation strategy. When it’s month-end, all you have to do is click a button for a complete depreciation journal to take place rather than posting an entry for every item in the register.

Similarly, recurring journals related to prepayments can take up significant resources for large SAAS companies. Setting up schedules to post recurring journals will ensure these can be completed automatically at month-end, eliminating the risk of team members forgetting to post them.

Group consolidations

If you work in a large company, it will likely consist of several related group entities and a corporate structure. This may be due to the creation of new companies for international markets or products as well as efficiencies related to tax planning.

Many mid-market cloud accounting vendors have limited consolidation features or may not offer this functionality. Consolidating at the group level is essential as it gives you full visibility of how the overall company is functioning.

Many CFOs still download data manually and consolidate via spreadsheets. While this can be a workaround, it still takes time and creates the possibility of not applying consistent standards at the group level, such as revenue recognition.

Instead, using a cloud consolidation tool, such as Spotlight Reporting and Fathom, can consolidate all entities at the group level and apply consistent accounting standards related to revenue recognition and currency gains/losses.

This will give you visibility on group performance in real-time rather than just once per month.

Intercompany recharges

Companies with multiple entities have to post monthly journals to reclassify costs and revenues across their group for better visibility of how each company is performing.

For example, one company may pay SAAS costs on behalf of the entire group, with them needing to be recharged for each entity. Until recently, there has been no way to do this through automation, with this work being completed manually and on spreadsheets.

However, emerging vendors like Mayday allow you to create rules to apportion and calculate costs to group companies. Recharge rules can be made based on costs, cost plus or on a percentage basis.

You can review the final transactions before they are posted as journals through accounting software integrations.

Inventory management

Companies selling physical goods have extra complications compared to those who just sell services.

If this applies to you, you’ll need to run an inventory management system to keep track of stock levels, including returns, defective items and unfulfilled orders.

It’s still common for finance teams to run their inventory on disparate systems from their cloud accounting software that require a login and the need to upload and download records.

Adopting a cloud inventory system, such as Unleashed, ensures that stock data is always up to date. It handles tricky accounting entries related to returns, samples and stock in transit.

Real-time visibility of stock levels will also help optimise sales and ensure customers are not disappointed about stock being listed as available when it’s not.

Payroll

You need to pay staff accurately and on time as they are the most important asset in any business.

However, running payroll is a complex and time-sensitive task. Your team will only have the necessary data to run it around a week before the month end and then a couple of days to approve and set up payments once it has been checked.

Payroll can be streamlined by incorporating cloud payroll tools, such as BrightPay and IRIS Payroll. These tools provide finance teams with an easy-to-use interface and workflow while doing the heavy lifting in the background.

Unlike working off spreadsheets, this automatically updates rates for PAYE, NICs and student loan payments and takes care of fiddly elements of, including mid-month pay rises, pensions and student loans.

Getting data into accounting software becomes easy by using APIs to map payroll records to their relevant entries into the chart of accounts, with journals being created for easy import via CSV files.

Spend management

Managing employee expenses is usually a significant admin burden. Finance teams often receive out-of-pocket expenses and associated reports of variable quality, with transactions misclassified.

Alternatively, corporate cards provide you with poor visibility and spending limits. This makes it challenging to track how funds are being spent and the categories they relate to. However, adopting a spend management platform for employee expenses will improve the accuracy and visibility of employee spending.

Tools like Soldo, consisting of pre-paid debit cards and a software platform, improve the accuracy of reporting. Soldo does this by automatically capturing values from photos snapped by employees. Soldo then selects the most relevant category based on chart of accounts data imported from core accounting software.

Additionally, you can access a real-time view of employee spending to enable better decision-making related to budgeting. For example, you may make more funds available for marketing activities showing a high return on investment.

Apply an iterative mindset to finance automation

Applying a culture of continuous improvement through automation can result in productivity gains. Automation allows you to benefit from closer to real-time information and faster production of management information.

Stay on top of the latest developments by tasking a member of your team to monitor new releases on the app marketplaces of accounting vendors.

Related posts

business-2-en-gbBusiness, Enterprise, Accounting Tips, Business, Finance, Scale-up advice, Business, Finance, Scale-up advice, Business, Business, Business

How to compliantly and legally make employees redundant

11 January 2023   |   8 minutes read
Business leaders discussing how to make employees redundant

As explored in a previous post, the current economic downturn makes employee redundancies much more likely. This is for a few reasons. The main cause, of course, is more businesses must now cut costs.

But some companies are pivoting their business models or introducing new technology to enable efficiency savings. If you need to make layoffs, it’s never an easy step (especially for the workers affected).

The UK benefits from strong employee rights. As the employer, there are several steps you must follow to keep things compliant and legal. Failing to do so can result in costly legal fees, payouts and reputational damage.

Follow our guide below to make sure you follow procedures by the book.

Offers of alternative work

Before kickstarting formal layoffs, try to avoid redundancies by finding alternative positions in your company for those at risk of being selected. Offers should be unconditional, in writing, and show how the new job differs from the old one at risk.

New jobs must start within four weeks of old ones ending, and offers must be made before existing contracts end.

Fair selection criteria

If the above isn’t actionable, then you need to take the next step: selecting people to make redundant. When choosing who to let go, you must do so through a fair selection process rather than just an arbitrary cost-cutting exercise.

This should consider:

  • Skills
  • Qualifications
  • Performance
  • Attendance
  • Disciplinary records

While making decisions based on length of service (i.e. “last in, “first out” ), you shouldn’t purely rely on this basis. This is because employees who have recently entered the workplace will be most at risk with this approach, which can open you up to age discrimination.

Unfair selection criteria include:

  • Pregnancy, including maternity leave
  • Part-time or fixed-term employees
  • Age, disability, race, religion, sex and sexual orientation
  • Being part of a trade union

Consultation period

When you’ve selected employees to be affected by redundancy, engage with them by undergoing a consultation process.

Failure to do this can result in you being taken to an employment tribunal due to being classified as unfair. Consultations do not have to end in an agreement between you and those affected. But you must make efforts to take on board the views of both parties.

Making 20 employees or more redundant

If you make over 20 employees redundant in 90 days, you must follow the collective consultation rules:

  1. Inform the Redundancy Payments Services (RPS) before the consultation process starts.
  2. Engage with a trade union representative. If one doesn’t exist, liaise with staff directly.
  3. Provide information about planned redundancies, giving those affected sufficient time to consider them.
  4. Respond to requests for information.
  5. Deliver termination notices for staff affected with the agreed leaving date
  6. Issue redundancy notices

Note: you can be fined an unlimited amount if you do not notify RPS.

Find out further information about consultations on the Advisory, Conciliation and Arbitration (ACAS) website.

Making less than 20 employees redundant

When you make less than 20 employees redundant, there isn’t a set process for consultations. However, it’s still good practice to consult employees, and their representatives. This minimises the likelihood of employment tribunals.

Giving staff notice

Once redundancy consultations are completed, notice and a leaving date must be agreed with staff. The leaving date will be based on the length of service they have delivered for your company.

  • A week should be given to employees who have served one month to two years.
  • Employees who have worked between 2-12 years are due an extra week’s notice for each additional annual period served.
  • Employees with over 12 years of service have their notice period capped to 12 weeks.

Staff are allowed to leave earlier than their planned leaving dates if you offer payment in lieu. If your business allows, this can be a good strategy of retaining goodwill.

Redundancy pay

Affected individuals are entitled to a statutory redundancy payment if they have met the following conditions:

  • They are working under a contract of employment as an employee.
  • Have worked at least two years continuous notice.
  • Been dismissed, laid off or put on short-time working

Statutory redundancy pay rates

The value of redundancy payments for qualifying employees is based on a combination of the age and length of employment of staff:

  • 1.5 weeks’ pay for each year of employment after their 41st birthday
  • One week’s pay for each year served after their 22nd birthday
  • Half a week’s pay for each year served up to their 22nd birthday

The length of service is capped at 20 years.

The value of statutory pay rates is calculated at the average they earned per week over the 12 weeks before they were served their redundancy notice. Tax is not deducted on the first £30,000 of statutory redundancy pay.

An online calculator is available on the Government’s website to help you with the final calculation.

Related posts

business-2-en-gbBusiness, Enterprise, Accounting Tips, Business, Finance, Scale-up advice, Business, Finance, Scale-up advice, Business, Business, Business, Business

How to become a CFO: 5 unusual ways to the top of the finance ladder

20 December 2022   |   14 minutes read
CFO presenting to his team

How do you become a CFO? If there’s one thing we’ve learned after 70 episodes of our podcast, The CFO Playbook, it’s that there’s no “right” pathway.

In this post, we’ll take a look at five unusual routes our podcast guests took to becoming CFOs, and what their journeys can teach us about the skills required to excel at the top job.

1. The accidental CFO: Minna Technologies’ Navpreet Randhawa
When Randhawa started his career, becoming a CFO was the furthest thing from his mind. Armed with an MBA degree, he headed off to Chicago to work in banking. But it didn’t take him long to discover it wasn’t really what he wanted to do.

“We were brokering a deal,” he says, “And I remember telling myself I didn’t want to be the one facilitating the deal…  I wanted to be the one who’s buying or selling.”

This flash of insight led him to return to Delhi and start Help for Comfort — an online marketplace for unskilled labourers for which he raised $2 million in funding. This was followed by a three-year stint managing Startup India — the Indian goverment’s flagship technology initiative — and two and a half years as a freelance investment advisor.

So how did he find himself thrust into his current role as Minna Technologies’ CFO?

Around 2018, Randhawa says, he decided he wanted to go back to building something. But because his previous experience as a startup founder was, in his own words, “lonely”, he was keen to work with someone else.

As luck would have it, he stumbled across Minna Technologies online, and the company impressed him so much that he got in touch to see how he could help. A few conversations later, the CEO had persuaded him to move to Sweden and become the company’s CFO.

Where he ran Help for Comfort entirely on his own, Randhawa has made teamwork a cornerstone of his approach at Minna Technologies, relying on the expertise of specialist vendors and, more recently, a small in-house team.

This, he says, has made things simpler and more straightforward.

“My job is to analyse… to look at the numbers and take critical business decisions. But I’m always listening and talking to vendors, because they are subject matter experts.”

But while his path has worked out for him — between 2019 and 2022, Minna Technologies have grown exponentially and raised $21.7million in series B funding — Randhawa cautions would-be CFOs against running before they can walk.

“It’s about knowing what you’re good at and what you’re not good at…” he says. Successful CFOs play to their strengths, and surround themselves with smart people who excel at those aspects of finance they can’t do so well.

2. Lateral moves: Carta’s Charly Kevers
Unlike Randhawa, Kevers knew he wanted to become a CFO early on. But he was also very open to trying different things. As a result, his career took several twists and turns.

Following a year as junior auditor, he spent five years with a consultancy, then worked as a global strategist for Samsung and as an investment banker with JP Morgan.

He then worked at Hewlett Packard — first a senior strategy and corporate development manager, and then as director of investor relations — and as senior corporate development director at Salesforce, before becoming Finance VP at Lending Club and, eventually, Carta’s CFO.

These moves were deliberate.

As a consultant, he says, “I was exposed to a lot of different CFOs and CEOs and a lot of different executives, which really shaped how I thought about future opportunities.”

In particular, he came to believe that gaining experience in different roles, industries, and markets would be beneficial later on.

His experience at Carta has convinced him he made the right choices.

“I’m more involved in product and strategy than I ever thought I’d be,” he says. “And it mixes the software components, the capital markets components, and the fintech components of everything I’ve done in the past.”

He also singles out his time at JP Morgan as being especially formative. “It [taught me] a lot of skills that are tough to build otherwise in terms of understanding how investors approach their investments, how to communicate to them, and that whole aspect of the CFO job, which is a big piece of what I do today.”

Unsurprisingly, Kevers’ advice to aspiring CFOs is to try a variety of roles.

“If you’re an accountant, don’t stay in accounting forever and expect to become a CFO,” he says. “Move around. Try different things. Think about the broader set of skills that you have little exposure to and find a way to get some…”

3. Learning on the job: Bam Boom Cloud’s Kirstine Archer
Archer “fell into accounting” — the path that would lead her to her first CFO role — aged 18, while waitressing at her local entertainment complex.

Her father had just passed away. So, she’d shelved her uni plans and turned her student job into a full-time role while she reassessed what she wanted to do.

As it happened, her bosses asked her to do their payroll administration, and she did such a good job they added accounts administration to her duties. “It was never deliberate,” she recalls, “which I think is a fairly common theme with accountants.”

Eventually, she landed a job at PwC making security passes while travelling around Australia. And even though her role was unrelated to finance, the experience left a lasting impression.

“I thought it seemed like a really cool place to work,” she says, “so I resolved to go and work for them when I got back to the UK.”

As luck would have it, PwC UK advertised for assistant accountants soon after her return. She applied, was hired, and got on the path to becoming CFO.

Kirstine’s experience has made her a staunch advocate of apprenticeship schemes.

“I think it’s incredible that you can be qualified as an accountant at the age of 21,” she says. “[But] not everybody wants to get lumbered with, you know, tens of thousands of pounds worth of debt every year…”

“Apprenticeship schemes,” she continues, “give people from different walks of life the opportunity to better themselves and get that first step on the career ladder. Knowing you’ve got options should be empowering to young people… it’s something I didn’t have at school.”

Even for those who take the traditional path of going to uni straight out of college, Kirstine stresses that getting some work experience under your belt — even if it’s part-time — is massively important.

“…there are a lot of skills that you don’t get until you come into the world of work,” she says. “…entrepreneurial spirit… communication … even just logic and problem solving…”

Watching how your peers do things and learning from them can help you build the skills you need to be a great CFO later on.

4. From analyst to strategist: dotdigital’s Paraag Amin
Amin spent much of his career as a market analyst with major investment banks. But while he’d never worked in a purely financial role, his skill set was a perfect fit for dotdigital.

“CFOs are sometimes wrongly stereotyped as bean counters,” he says. But the role requires somebody who can “forecast and look ahead… translate the numbers into something tangible.”

As an analyst, this is exactly what Amin spent most of his work days doing.

“You’re modelling company financials… you’re meeting [and] evaluating management teams, and then you’re looking at business strategy,” he explains. “A lot of those skills are very transferable into management roles within businesses… Ultimately, that’s a lot of what a senior executive team needs to do.”

In dotdigital’s case, it helped that there were already several accountants in senior roles.

“At the time, all three of the board members were accountants, the financial controller was an accountant… we were very accountant-heavy,” he says.

What dotdigital needed was somebody who could take those numbers and build a picture of where the business was going, its strengths and weaknesses, and the threats and opportunities ahead.

But the ability to use numbers to formulate a narrative, says Amin, is increasingly important to any CFO, regardless of their background and the makeup of the organisation they work in.

“I think a large part of the modern CFO’s role is helping optimise internal processes within the finance function and the wider business… that digital transformation everyone’s talking about,” he explains.

As the person with access to “pretty much all of the data that sits within the organisation” the CFO is ideally placed to do this and to help other leaders across the organisation make decisions about the best way to use their resources.

5. Making your own luck: Hillspire’s Ken Goldman
Goldman‘s love of technology led him to study engineering. But he found himself being drawn to finance early on in his career.

This gave him the idea of blending the two together by building a technology-focused company where he’d be in charge of the financial direction. So he decided to move to California, where the tech industry was thriving.

As soon as he arrived, he started looking for jobs that would build up his financial experience. First, he worked as an accounting junior. Then he moved to the tech company Memorex.

“I learned about corporate budgeting… some Treasury… how to manage people,” he says. “It was important to me to get experience in all the major functions of finance.”

His hard work paid off, and, in 1989, he landed his first role as CFO.

Like Kirstine Archer, Goldman thinks real-world experience is key to succeeding as a CFO. “You don’t learn how to manage people by reading books,” he says. “You learn by trial and error… you find things that work for you.”

He also stresses the importance of making your own luck.

“You need to put yourself in position to do well,” he says. “You don’t necessarily control [when the right opportunity will come along] but you control your destiny in terms of the experience you want to get.”

Goldman has three pieces of advice for aspiring CFOs.

“I think, first of all… develop a track record of accomplishments, so you have something that demonstrates you’ve done real work and you’ve gotten things done. You’d be surprised how many people talk a good game but don’t get things done.

“[Second] be prepared. Try to get as much relevant experience as you possibly can. Learn how to work with a team and manage people, because it’s not obvious how to do that…

“[Third] network. All my roles came from my network. So be visible. Go to conferences and events. Make connections. It’s really important.”

There’s more than one way to become a CFO
“The role of CFO,” says Soldo CFO Dynshaw Italia, “has become much broader in scope. The traditional responsibilities like cash flow management, accounting and reporting, internal controls, financial planning and analysis, fundraising, and M&A are still there.

“But, on top of that, the CFO is expected to be much more involved in the strategic direction of the company, interpreting and providing insights on the huge volumes of data generated by businesses and dealing with the ever-increasing compliance requirements in an organisation.”

The upshot is that, while a good grounding in finance and knowledge of the business you work in are undoubtedly essential, succeeding as a CFO today requires a much wider breadth of experience.

Taking the road less travelled can help you become more well-rounded and enable you to approach the role with a fresh perspective.

Related posts

business-2-en-gbBusiness, Enterprise, Accounting Tips, Business, Finance, Scale-up advice, Business, Finance, Scale-up advice, Business, Business, Business, Business, Business

Soldo wins Fintech of the Future at the Banking Tech Awards

15 December 2022   |   3 minutes read
Soldo are award winners

Soldo has been named the Fintech of the Future in the Payments category at The Banking Tech Awards. The Awards, now in their 23rd year, recognise excellence and innovation in the use of IT in financial services worldwide.

The gala evening featured some of the world’s most influential financial institutions, including Lloyd’s, Morgan Stanley, JP Morgan and BNP Paribas.

For banks and financial institutions, winning a Banking Tech Award recognises “the value of their technology investments and showcases their skills, commitment, creativity and execution”.

Fintech of the future

When Soldo started in 2015, we were just six people in a Marylebone basement. Fast forward to now, the company has raised almost $250m in funding, employs around 350 people and is trusted by over 30,000 customers in the UK and across Europe.

A lot, it’s safe to say, has happened in the last seven years. The UK left the EU, a global pandemic and now a recession. But Soldo’s growth trajectory has remained positive, and our technology has advanced alongside the business.

We’re evolving into an API-centric in-house cloud payments technology platform. Our flexible expense management software empowers businesses to automate 80% of manual processes; saving 6 days every month usually spent doing reconciliation.

Bank strength

This award – and the institutional company that Soldo now keeps – indicates the depth of our ambition.

A phrase you may hear, more and more, is ‘banking as a service’. The bank value chain is being disrupted and deconstructed with parts of it now being delivered through software applications.

This model has now come of age, And we’re proud to have played a vital part in this story. We’re also proud to be recognised with this award. It’s been almost a decade of pursuing big ambitions and serving our customers’ evolving needs. The next decade promises to be even bigger.

Related posts

business-2-en-gbBusiness, Enterprise, Accounting Tips, Business, Finance, Scale-up advice, Business, Finance, Scale-up advice, Business, Business, Business, Business, Business, Business

Five business lessons you can learn from your Christmas shopping

14 December 2022   |   12 minutes read
Christmas shopping

It’s that time of year again. Christmas ads are on the TV, seasonal deals are in the shops and (miraculously) there’s snow to add to the festive spirit. It must be time to get your Christmas shopping done. But how does that tie in with your business success?

In fact, there are plenty of business lessons to learn from a good Christmas shopping experience. And we’ve wrapped up five of them as our seasonal gift to you:

Find out what people want

We’ve all received a Christmas gift that we don’t really want. It might be an ill-fitting hand-knitted jumper from your auntie, or the latest book from an author you dislike. That’s why it’s so important to ask around and see what your family members want for Christmas!

Doing your research is important, and the same applies when running a business and aiming your products or services at an expectant customer audience.

Offer something they actually need

Customers will prefer a product or service that meets their expectations and fulfils a purpose. To do this, tailor your offering to their needs. Find out what their problems or pain points are and make sure that you’re solving them.

You might find that your customers are highly motivated and actively looking for a product or service to meet a specific need. On the other hand, you may have identified a need that your customers aren’t fully aware of. If this is the case, you’ll need to focus your attention on education before setting your sights on adoption.

The key point here is to offer a product or service that your customers actually need, rather than simply the product or service you want to sell.

Learn their habits, interests and preferences

Use market research and customer feedback to understand your customers’ habits, interests and preferences so you can target your offering more effectively. And, more importantly, do this research to understand whether your product or service is genuinely having a positive impact.

Does it solve your customers’ problems? Is it easy to use or access? Have you made it simple for customers to understand how it works? Is there low uptake on a certain feature of your product or service offering because that feature isn’t actually useful or attractive to your customers?

When you know the answers to these questions, adjust your approach accordingly.

Look around for the best deals

Christmas is an expensive time of year, especially when cash is short. As a result, you don’t want to spend any more money than you need to, but you still want to give something special to your friends and loved ones. So, finding the best deals is a no-brainer.

In the digital age, it’s easier than ever to search for the cheapest prices and the best Christmas deals. And it’s the same when buying for your business. To get good deals:

  • Do your online research – look up the online prices of common items you buy for the business, and shop around to get the lowest possible prices
  • Go where you know – if you have a trusted long-standing relationship with your suppliers, they’re more likely to agree to discounts and lower prices for buying in bulk and so on
  • Shop around – if you’ve relied on the same suppliers for years out of habit rather than loyalty, it could be time to start exploring other (potentially cheaper) options
  • Plan ahead – if you can source the things you need long before you need them, you may find you get a better deal out of season when there’s lower demand

Spread your shopping out

The combined cost of Christmas shopping, decorations, food and socialising is a big hit to your cash flow. One way to reduce the impact is to spread out your spending across the months leading up to Christmas. This stretches the multiple festive outgoings across a longer period of incomings, easing some of the cash flow pressure.

The same is true of your business spending. Spreading your expenditure out over the period helps you balance your income and costs, so you stay cash flow positive. To ease the impact of spending:

  • Spend little and often – where you have regular fixed costs, try to buy these items at different intervals throughout the month, so you spread the cash flow impact
  • Use credit where it makes sense – if you have access to credit facilities, make use of them. Using credit helps you delay the cost and spread it out via repayments

Pay attention to the wrapping

Who of us hasn’t been lured in by the look of a beautifully wrapped present under the Christmas tree? The way we wrap, decorate and present our gifts is such an important part of the festive atmosphere. And the same goes for the way you present your brand.

In hospitality, they say the first bite is with the eye. And when it comes to your brand, the look of your products and the quality of your presentation is key to engaging customers.

Make your brand look inviting

Bold colours, an exciting logo and top-class design are all ways to make your products look more enticing to your customers. If that makes sense for your brand! The way you achieve a look and feel that feels ‘inviting’ to your customers will depend on who they are, what your business offers, the industry you operate in and so on.

Think of your website as your shop window; what does it say about your business? Is it bringing people in and, importantly, are those the kinds of people most likely to become customers? The text and design elements should work in harmony, achieving a beautiful balance of SEO, brand positioning and highly converting copy.

Pay close attention to your brand guidelines

To keep your products looking uniform and consistent, stick to your brand’s visual identity. Customers will be able to spot your products from a distance (as long as they’re not wrapped under the tree).

The same goes for anything a customer might see and attribute to your business; from a salesperson’s business card and other printed collateral to your LinkedIn profile banner and company email signature.

Keep track of those card taps

In an age of contactless payment and ‘tap and go’, it’s all too easy to get carried away with the Christmas spending. Having access to a contactless card does make payments easier – but be careful not to overspend and go too trigger-happy with your debit card.

Your business and employee expenses work the same way. You want your team to have the ease of tap-and-go for business purchases, while maintaining visibility and control over that spending so you can keep your cash flow running smoothly.

With Soldo’s prepaid cards and connected expense management software, you can:

  • Set custom limits and ring-fence budgets – so you have complete control over who can spend what and which budget every card tap comes out of
  • Track and review spending in real-time –  approve payments on-the-go and see transactions as they happen, so you avoid any month-end surprises
  • Capture receipts and connect to Xero – or Sage, Quickbooks and other accounting software, so bookkeeping and reconciliation are quick and easy

Find out more about how our customers use Soldo to control spending and save money here.

Have yourself a merry little Christmas

We hope our Christmas shopping tips have given you some planning and strategy ideas for the coming year. Managing your Christmas budget and your business budget are not so different. Ultimately, it’s all about being in the best possible control of your spending.

From all of us here at Soldo, we wish you a very happy holiday and a relaxing time away from the workplace. We’ll see you in 2023.

Related posts

business-2-en-gbBusiness, Enterprise, Accounting Tips, Business, Finance, Scale-up advice, Business, Finance, Scale-up advice, Business, Business, Business, Business, Business, Business, Business

How to handle layoffs with empathy

13 December 2022   |   7 minutes read
An office team that may be subject to layoffs

Unfortunately, the UK falling into a recession increases the possibility that you may need to reduce headcount. This extremely difficult process is affecting a range of businesses, including large firms. Google, Meta and Twitter have let tens of thousands of employees go, for example.

It’s never easy. Not for you and certainly not for the affected workers. The role of deciding who to make redundant, alongside the necessary processes, falls typically on the shoulders of finance teams.

It is a huge responsibility. You are dealing with people’s livelihoods. As well as damaging material wellbeing, being laid off can have a long-standing negative impact on the self-esteem of individuals.

While the compliance process for how to do this can be followed through sequential steps (and will be covered in a companion piece to this post), you’ll also need to deal with soon-to-be departing employees empathetically.

Doing this will minimize the negative mental health impacts. It’s also good business. Former employees may become future customers. Or could even rejoin the company one day.

Establish an alumni network

An alumni network is an easy act of goodwill. A network lets you keep in touch with departed employees and inform them of company developments. Membership is, it goes without saying, optional.

Large consulting companies do this very effectively. The Deloitte Alumni Network is an online portal comprising over 20,000 former employees. The platform provides two-way opportunities for the company to dispense relevant information about recent developments and for alumni to showcase their work and make new connections.

The alumni network also allows Deloitte to showcase their latest vacancies, to tempt back departed staff into new roles or act as a cheap and powerful referral engine that taps into a wider referral network. A semi-regular newsletter is also emailed to members to engage with individuals who are not in the habit of logging in to the platform.

Help employees find new work

Being proactive in helping employees find new work can minimize any potential disruption.

This should include the C-suite being transparent about any company restructuring. Some recent examples include personal messages on social media about their business’s change of direction, endorsing the high quality of departing staff, and earmarking specific functions that have been downsized.

You’ll need to be careful with the messaging and articulate this as a sustainable growth strategy to minimize potential reputational damage. Employees shouldn’t be explicitly named, but an email address should be set up and shared for interested employers to reach out on.

Provide coaching and support

Getting laid off can have long-term effects on people’s mental health. While decisions are made with the needs of the business in mind, individuals will often take this personally. Coaching, counselling and other support can help.

Employees are likely to be more trusting of external consultants due to their independence. So this service should be outsourced wherever possible.

There are now a number of specialist coaches available who provide support services related to dealing with the mental process of dealing with redundancy. These coaches can also put a plan in place to find new work for those lacking motivation.

This can be framed positively as an opportunity for individuals to learn new skills and pivot their careers to something they are more passionate about. Or something that fits in better with their lifestyle.

Go above compliance requirements for redundancy remuneration

While employees who have built up two years of service will be entitled to a redundancy package, those who don’t have employment rights are not legally entitled to anything.

This is obviously hugely frustrating for someone who just recently joined your company. Especially those who were headhunted from a long-standing role they were in previously.

In these circumstances, make a financial gesture beyond your legal requirements. For example, this could be a couple of weeks of their salary or a token amount such as £1000. It’s not much, but it is an actual, material token of support.

Additionally, if you are reducing your headcount, you may have excess IT equipment that the business no longer needs. Things like monitors or office chairs. These things may be valued by those leaving. Giving this away is a negligible cost for your business. Especially if the equipment is already a few years old and has been written off.

Put empathy first

Being laid off in your career is becoming increasingly common, irrespective of how talented employees are.

There’s no joy in layoffs. Particularly for those affected. But there are at least a few things you can do (financially, emotionally and professionally) that can mitigate the worst effects.

Never throw workers to the wolves. It’s wrong to do this, of course, but it’s also bad business practice. The people being laid off can be clients one day, or return to the business one day. Most people, eventually, accept the decision is not personal – but only if you act in a way that confirms this idea.

Related posts