Accountants have been increasingly successful in persuading SMEs to reforecast their financial performance in the second half of 2020, according to the year-end results of the ACCA and The Corporate Finance Network (The CFN) SME Recovery Tracker.
In early June, only 27% of smaller businesses said they had completed a reforecast of finances to take into account the effect of the global pandemic. However, in the following months, the figure rose to 49%, as accountants encouraged clients to take a fresh look at their financial prospects, supported by industry-wide campaigns such as the #LeaveNoBusinessBehind initiative.
But the latest survey results still show worrying signs for SMEs, with only 15% of businesses being fully aware of their funding requirements and financial risk over the next six months.
The tracker also revealed concern from accountants that overwhelmed SMEs may not have made a plan to pay outstanding or deferred tax and VAT bills. The deferral is due to end in March 2021 and many microbusinesses face being hit by unplanned debt.
Claire Bennison, head of ACCA UK, said: ‘It’s clear that many businesses have been in survival mode and deferral of tax and VAT bills has been a key factor.
‘However, with Self Assessment payments coming in January, the deferral coming to an end in March, and VAT changes for those who trade with the EU, now is the time that they should be speaking to their accountant and planning to set up a payment plan with HMRC, for any outstanding and deferred debts.’
Kirsty McGregor, founder of The Corporate Finance Network, said: ‘It’s great to see that accountants have been on the case with clients over the past few months and have been successfully encouraging them to do a new financial projection for their business.
‘SMEs need to continue to focus on their future funding needs and their advisors will then be able to provide alternative solutions for their clients. With the Coronavirus Business Interruption Loan Scheme (CBILS) drawing to a close at the end of January 2021, businesses should apply now if they are eligible or speak to their accountants about possible options for other commercial borrowing, Time to Pay arrangements with HMRC or routes to restructure their business and overhaul their strategy.’
As the year draws to a close, the tracker results have shown consistently high levels of stress and anxiety among entrepreneurs running smaller businesses.
The latest figures reveal that 52% are feeling more stressed and anxious than usual and a worrying 9.5% are feeling unable to cope.
Working alongside experienced accountants will allow SMEs to find some support and advice, which may remove some of that pressure, as we all look to help the economy grow again in 2021.
For media enquiries, contact:
Michael Jarvis,
Michael.jarvis2@accaglobal.com
+ 44 (0) 7538 258897
Twitter: @ACCANews
Notes to Editors
About the ACCA UK and The CFN SME Recovery Tracker
This edition has sought views from accountants working in practices advising some 3,805 SME clients. The poll closed on 16 December.
About SMEs
SMEs, (typically less than 250 employees), account for 99.9% of the private sector employment in the UK and there are 22 million employees working for these private sector businesses.
About ACCA
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
ACCA supports its 219,000 members and 527,000 students (including affiliates) in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 110 offices and centres and 7,571 Approved Employers worldwide, and 328 approved learning providers who provide high standards of learning and development.
Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.
ACCA has introduced major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally.
Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability.
About The Corporate Finance Network
The Corporate Finance Network – www.thecfn.org.uk – The Corporate Finance Network consists of some of the most proactive and commercially astute regional, independent accountancy firms in the UK. They specialise in providing corporate finance advice for smaller transactions.
