Easing the impact of professions fees on cashflow

At a time when SMEs are juggling rising costs due to inflation, energy costs and supply chain disruptions, preserving working capital is critical to ensuring business resilience. For legal and medical businesses, single payment, large professions costs such as insurance, VAT and tax bills can create periodical cashflow challenges.

Phil Simmons, Senior Business Development Manager, Professions Finance at Shawbrook answers the burning questions on professions fees and tax liabilities, and explains what Solicitors and Medical Professionals, and their brokers can do to manage these demands on cashflow and maintain optimal working capital.

Like all businesses, legal and medical professionals need to submit their tax returns annually and their VAT returns quarterly, making payment for any liabilities to set dates. Indemnity insurance policies also have to be maintained, whether on a 12, 18 or 24 month renewal period. These can be significant sums to manage within the P&L.

At the same time, firms are focusing on their customers, be that dedicating resource and time to stay abreast of regulatory developments, or focusing on optimal patient outcomes. The proactive management of these large expenditures can often take a back-seat, meaning firms have less time to mitigate the impact on their balance sheet when payments come due.

By working with a funder that understands the submission process, brokers can connect their clients to a range of flexible funding solutions that can help to spread the cost over longer terms, thereby flattening out the working capital requirements. One such example is VAT bills which are due quarterly. Late payments result in extra charges. Arranging a VAT funding facility ensures the full payment is made in advance of the HMRC due date without impacting on the firm’s cashflow.

Shawbrook provide business loans to cater for a wide range of professions costs. Our funding is tailored to meet each client’s needs and our solutions can combine multiple elements including:

• Company and partner tax
• VAT funding
• PII Indemnity Insurance and Practicing Certificates
• Refurbishment costs
• Equity and Acquisition loans

Speedy processing due to our digital documentation, fast pay-outs directly to clients and the access to a dedicated finance expert at the end of the phone are the most obvious benefits for our brokers and their clients.

Some professions fees are time critical and paperwork is cumbersome to submit, so speaking to us will ease the workload. And the most obvious benefit is that our funding flattens out working capital requirements whilst enabling clients to plan and make these repayments over a set term.