Insight Associates provide outsourced accounting and Finance Director services to ambitious and growing businesses. We work as your only resource or with existing staff to give you complete financial support including monthly management accounts, high level financial advice, robust controls and financial systems, funding and business planning, payroll & compliance, VAT returns and statutory compliance.

Successful business leaders have all the information they need to make good decisions…Do You?

Thursday, December 31, 2009

Proceed with caution?

I have been asked a number of times in recent days and weeks how I feel 2010 is going to be for UK businesses (particularly small ones).

My response has been that we are far from out of the woods yet and even though the media seem to be trying to talk us out of recession my feeling is we are far from there no matter what any official statistics may say. Historically the failure rate for businesses are higher in the period following the bottom of a recession than when going into it, and I really can't see this being any different. Indeed talking to Insolvency Practitioners recently they all expect to be busy in 2010.

The worlds economies are generally in a perilous state. The level of debt that the UK now has is unprecedented and it has to be paid for. The impending General Election is just putting off the tough decisions, and as a result things like the recent Pre Budget Report ("PBR") just glossed over the real issues. There can be little doubt that in the UK the tax take must rise significantly over the next few years and public spending must come down substantially. Add to this the threat of inflation increasing and the measures that may be necessary to control that and things don't look that good to me!

So focusing on when the official statistics say we are out of recession (when growth becomes positive) is really not the point.


Just yesterday on Twitter, Entrepreneur and TV's Dragon's Den panelist Duncan Bannatyne commented: "2010 is the year of danger for British Businesses and it is best to proceed with caution". Bang on Duncan.

If you are running a small business don't be fooled into thinking it is all going to be OK. It isn't!  You need to ensure you continue to run a VERY tight ship and manage your cash flow like your whole life depends on it. Many businesses are really bad at this, make sure you are not one of them.

If you don't already have it in place ensure you monitor your cash position daily and constantly forecast out a number of weeks to know exactly what your cash is likely to do. Make sure the assumptions you make are realistic (it's only you that you are kidding otherwise) and take a worse case approach. If you need a basic template to get you going take a look here

If you need help you know where to come!!

Monday, December 21, 2009

The end of a decade ...

Not strictly on topic, but as it's Christmas!!

When talking to our members at the Bishops Stortford Breakfast Club at our last meeting of the year on 9th December, I commented that it was 10 years since we were all celebrating the millennium. Incredible isn't it? Where did that go?

Back then we were all worried about the Millennium Bug and all the pre-printed stationery that had "19" ready for us to fill in the date!

Then I received this from our friends at Shadowfax Technology, and thought is was worth sharing.

10 things you could not do at the start of the decade:
  1. Download songs from the Internet
  2. Access the Internet from your mobile telephone
  3. Communicate with friends and colleagues via Social Networking sites
  4. Online grocery shopping, online banking, online dating ...the list goes on
  5. View television on demand
  6. Navigate by SatNav
  7. E Books
  8. Listen to digital radio stations
  9. Listen to music on an MP3 player
  10. Advertise on Google (key word advertising started in 2000)

And ... things that maybe won't be around at the end of the next decade?

  1. The Fax?
  2. Friends Reunited?
  3. Cheque Books?
  4. Video Recorders?
  5. Camera's with film?
  6. USB sticks?
  7. Mobile phone chargers?
  8. CD's?
  9. Personal telephone landlines?
  10. Big Brother??

Have a great Christmas and a very prosperous new year!

Friday, December 11, 2009

The PBR and all that ...

I took the time out on Wednesday to watch and listen to the Pre-Budget Report ("PBR") being delivered by Alastair Darling (the Internet makes all this so easy!). I am not interested by all the political manoeuvring, but there can be no doubt that the whole exercise was very lame and dsiappointing for good reason - the impending election.

Much comment before and since expected to see more being done to raise the tax take and attack some of the obvious areas such as Capital Gains Tax and VAT - but nothing. It has to come, but presumably now after we have had a general election. A poison chalice if ever there was one for any incoming Government.

One area that has received a lot of comment over the past year is the HMRC Business Payment Support Service ("BPSS") which we have commented on previously here and there is more information about on our website. This was introduced in last years PBR and has without a doubt been the most "successful" Government initiative to date to support businesses through these troubled times. There was some speculation that it might be closed at the end of December 2009, but the Chancellor confirmed on Wednesday that it will remain in operation as long as it is needed - which repeats his pledge of a year ago.

The BPSS has apparently now assisted over 160,000 businesses and deferred £4bn in tax payments. A good proportion of these business have used the service more than once.

Some commentators, including our good friend and colleague Keith Steven have suggested that all the BPSS is doing is putting of the inevitable. Many very fragile businesses that might (and should??) have otherwise failed have been propped up by this facility and when the prop is taken away they will then fail.

Our view is a bit different. We have used the facility very successfully over the past year with many client businesses and in some cases it has been the very difference between failure and being able to continue trading. Most of these same businesses are now finding cash flow a little easier, so it did have a positive impact. However, undoubtedly there are other cases where either the system has been abused or it is just putting off the inevitable.

At Insight Associates we do therefore very much welcome the decision to continue this facility for as long as it is needed as we feel sure it will help many businesses into 2010 - a time which may prove even more difficult for many. We are far from out of the difficult times yet.

Businesses using the BPSS must though be careful. It seems like easy money, but it is just buying time and careful planning and cash management is required. Ensure you can afford the commitment you are making as HMRC are getting increasingly tough on non-payers and are not shy of issuing Winding Up Petitions.

Insight Associates, Insight House, Riverside Business Park, Stoney Common Road, Stansted Mountfitchet, Essex, CM24 8PL, UK
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