Small businesses urged to plan ahead for pound coin changes
New pound coins enter circulation in late March and small businesses will need to plan ahead for its introduction.
Around 1.5 billion new 12-sided coins will become legal tender from 28 March, while the older coins will gradually be phased out.
In order to ensure a smooth transition period for businesses, the Institute of Chartered Accountants in England and Wales (ICAEW) has highlighted the need for forward planning.
From the middle of October this year, all old one pound coins will no longer be legal tender – small firms will need to therefore bank any that they have in their possession, or spend them, prior to that.
A failure to do so will mean that SMEs end up being sat on finances that are suddenly worthless – this will be especially important for retailers and other firms that handle significant amounts of cash.
Businesses will also need to potentially convert a number of machines and self-service checkouts to ensure they can handle the new tender.
Gym lockers, vending machines and parking meters are just some examples of where alterations will be required – such changes will need to be in place sooner rather than later too.
Other modifications for new £10 and £20 notes should also be considered, with the former set to be introduced this summer, and with a new £20 polymer note expected in 2020.
The key for businesses looking to avoid unnecessary losses is to put plans in place early for the changes – this should limit any increases in operational costs at a time when they are already rising rapidly.
This provides time to raise money to cover the costs through alternative finance options if needed, while reducing the likelihood of being caught-out by the introduction of new coins and notes.
The ICAEW advises against leaving anything until the last minute, as failing to update machines or bank old tender can easily result in financial loss.
Businesses with any concerns are also encouraged to seek advice if there is anything they are unsure on, or if they need help to ensure a smooth transition to the new forms of currency.
By Phil Smith
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