Today we launch the #LeaveNoBusinessBehind campaign to provide additional support to the wider accounting profession as we urge them to commit to encourage all business owners to prepare cashflow forecasts, so that they have a roadmap to lead them out of lockdown and into recovery.
We are concerned that with so many deferred and debt repayments becoming due over the next 12 months, business owners who don’t make a plan could be ‘sleepwalking into insolvency’ as it could only take one small thing to lead them into another crisis and ultimate business failure.
As the statistics* also demonstrate that business owners are still feeling under immense pressure and stress, despite the lockdown easing, we firmly believe that if entrepreneurs have a written plan of action, it could also help ease those worries tremendously.
Reluctance to face up to reality, to know how to prepare a plan and concern about incurring potential fees, are all reasons why only 27% of business owners from smaller companies have prepared a cashflow forecast, yet virtually all Finance Directors and accountants in industry are reporting they have already prepared their projections and are reviewing them on a weekly, monthly and quarterly basis.
Kirsty McGregor, Chairman of The Corporate Finance Network, explains “Creating a base-case financial forecast is a relatively simple and painless exercise, but then it becomes such a powerful document as it can be used to predict where working capital gaps are likely to be, whether redundancies or downsizing should be considered, or if growth opportunities will make a substantial difference to cashflow and profitability.
“I have been delighted with the range of support for this initiative from across the industry, not least from Capitalise who have dedicated substantial man-hours to bringing this to fruition today. Others such as Clarity, AVN, ACCA, Accountex, AccountingWeb and leading industry figures such as Paul Dunn, Steve Pipe and Mark Lee have also thrown their efforts into spreading the word and energy around this movement.
“We all have the same goal in mind, to hold accountants up as powerful and skillful professionals who can help rescue the SME economy and #LeaveNoBusinessBehind”
*ACCA/CFN SME Recovery Tracker statistics https://www.thecfn.org.uk/the-complications-of-reopening-and-managing-cash-flow-the-reality-of-the-lockdown-lifting-hits-hard-on-smes/