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My Mother – Lily 1926-2017

Lily
Lily Plumley

My mother passed away on 5th December this year, aged 91. So I thought I would repost this article I wrote for her 90th birthday.

She loved and was loved.

 

Wednesday 16th March was my mother’s 90th birthday. Following on from last week’s blog I thought I’d write about her early life and changes. Ninety years would be too long to cover in one blog.

Mother’s family moved from the Marlborough area of the Wiltshire countryside, settling in Archway, North London in the 1890s. If grandmother had been born a few days earlier she would have been born in Wiltshire. The family seem to have found a more prosperous life in London. At age eight a census shows my great grandfather living in a workhouse with his widowed father and brother, but life had improved considerably.

My mother was the youngest of three, with an older brother and sister. She was born in the same house my Grandmother lived in as a child and her grandparents lived with them. The area must have been a lively community where mother and family were well know. My mother remembers a constant stream of people calling in on my grandmother. Great-grandmother was trained as a cook and meals followed a regular pattern of roast beef on Sunday, cold Monday, minced Tuesday through at least until Thursday. Once a year the family spent a week’s holiday in Southend-on-Sea where great grandmother always lost her hat from Southend pier.

At the beginning of WW2, aged 13, mother was evacuated, with her sister, to Luton. Luton was a strange choice, being one of the first areas bombed. She was not made welcome, they were homesick, underfed and she spent her time hanging around parks and places to avoid their new carer. Pretty soon my grandmother decided to fetch them back and both sisters then remained in London for the entire war.

Archway being on a hill, mother had a panoramic view of the devastation caused by the bombing in the Blitz and remembers seeing St Pauls Cathedral surrounded by fire.

Mother worked at the admiralty in the heart of London. I think the worst bombing, for her, occurred later in the war with the doodlebugs and then the V2 rockets. Doodlebugs could be heard and when the engine stopped that is when they fell. The next innovation, V2s, was silent, they effectively fell out of a clear sky.

It wasn’t all rationing and bombs she went dancing a lot and ate out regularly  (possibly courtesy of various boyfriends) as restaurant meals weren’t subject to the same meager rations as food. There were  few young British men around, she went out with a Canadian, which was respectable. Americans were too brash!

Although in a reserved occupation, mother’s brother Arthur joined the army and was sent to Burma, he was wounded but returned to duty. When VE day arrived mother’s family were mourning his recent death in Burma from sniper fire.

Rationing continued after the war, perhaps this was the reason mother caught TB. Although I understand that penicillin had been discovered it was not yet a treatment for TB. Treatment was complete rest, fresh air and exercise at a sanatorium somewhere in the country. Mother spent almost a year recovering but not all patients survived.

So that briefly a quick run-through of Lily Plumley’s first 21 years, it is history but it is also a snapshot of person’s life.

2016-03-15 17.16.17 (2)Happy 90th birthday Lily.

Cash flow – modelling

In my previous articles I explained the importance of cash flow for both stable and growing businesses. I have been asked to provide more detail about the mechanics of analysing cash movements.

First a quick comment about forecasting… forecasts will always be wrong! This is very well explained on this website which covers forecasting strategy and requirements.

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Cash flow forecasts are more susceptible to error because they are an estimate based upon an estimate. That is, you first have to forecast (estimate) your future trading then estimate the periods for the resulting cash flows. For example, your terms of payment may be 30 days but some customers may take 40 days, or query a payment so that many of your cash receipts will occur later than your payment terms.

If the forecast will be wrong why bother?

In most cases any finance provider will expect to see a cash flow forecast; but if you are obtaining finance you need to have at least an idea of what levels and when finance might be required. In my experience it can be surprising how quickly a business can go from a large cash surplus to overdraft. Understanding how the elements of your business behave in cash terms is also a useful exercise.

Starting from the premise that you have a trading forecast and details of both revenue and capital costs, I’m listing below some timings to consider when constructing your forecast.

Sales Revenue

Timings of cash received will usually be different from the sales forecast which is based upon when a sale is made. So consider:-

  • Deposits
  • Payments in advance
  • Easy monthly payments
  • Retentions

You may have defined payment terms but realistically:-

  • Does (say) a major customer take a longer credit period?
  • How often do you experience slow payers or queries delaying payments?
  • What is your average rate of bad debts?

Purchases/costs

You should have more certainty about when you pay your costs but remember:-

  • Purchases are on whatever credit terms your supplier agrees.
  • Some annual costs may be shown in your accounts as incurred throughout the year although payable once a year; for example subscriptions or insurances.
  • Capital costs such as vehicles, equipment or furniture do not appear in your profit and loss account  but may be ‘one-off’ or lease payments over a period.
  • Depreciation does appear in your P&L account but is not a cash flow.

Salaries and wages

  • Wages and salaries are usually payable a week or month in arrears and net of income tax (PAYE) and national insurance.
  • PAYE and national insurance is payable in the following month but remember to add employers national insurance.
  • Cars and other benefits paid to employers attract an annual NIC charge.

VAT

There are many different VAT schemes, but assuming a VAT scheme used by the majority of businesses consider:-

  • On your sales you will receive VAT at 20% (UK) with the remittance from customer.
  • When you pay your customer you will pay VAT at 20% (UK) on most costs.
  • Each quarter you will then pay to HMRC the sales less cost VAT. However this is required to be calculated as due at the invoice date; so  VAT on your return will be payable/recoverable regardless of when is payment actually received/made. 

Other Taxes

  • If your company is profitable remember you will usually have company tax payments. These can be substantial.
  • If you import goods you may be required to pay duty when importing your goods.
  • Some payments made or received may have tax deducted at source. 

This might all sound quite complex, but once the costs/revenues and timings are modeled you can then quickly run various scenarios to assess what and when your company might have funding needs.

If you have any questions you can leave a comment below or my contact details are here. Find out about me here.