Cumbrian accountancy firm Lamont Pridmore have shared their concerns for businesses who are being squeezed by rising costs and call on owners to act now to forecast the impact and develop a plan.

Business leaders are grappling with increasing prices, including higher wage costs, energy prices, inflation on supplier costs, particularly imported goods, and other supply chain pressures.

Employers will also have to contend with a 1.25 percentage point increase in the National Insurance rate from April for the contributions they make and, at the same time, higher National Living and Minimum Wage rates. From April, the headline rate of the minimum wage will rise 6.6% to £9.50.

Like many families and communities, businesses are struggling with the cost-of-living crisis, with many finding it challenging to maintain a healthy cash flow as costs and taxation continuously rise.

On top of this, businesses are having to deal with the start of the repayment of Covid loans, international trade issues and growing late payment problems.

Graham Lamont, Chief Executive at Lamont Pridmore, said: “Given the incredible challenges that many businesses have had to grapple with over the last two years, rising costs is something that could have a massive impact on the profitability and cash flow of many firms.”

Graham said that it is more important than ever for businesses to prepare a financial forecast for the coming year to assess these impacts and decide how to mitigate them through efficiency gains or price increases.

Inevitably, higher costs for businesses must be passed on to customers, Graham explained, but he said it was worth having conversations about this beforehand to forewarn those that use a business’ services or products regularly.

He added: “Everyone is in the same boat. It never hurts to speak with regular customers to explain that costs may have to increase in future in line with inflation – it just gives them time to think about the impact on them and how they will deal with it, rather than facing a surprise bill in future.”

To find out more about Lamont Pridmore’s tax, accounting and business advisory services, visit www.lamontpridmore.co.uk or call 0800 2346978.