In times of economic uncertainty, businesses should have a clear plan to ensure that they can navigate any potential financial pitfalls.

One of the best ways businesses can do this is with the use of management accounts.

What are management accounts?

Management accounts are financial reports that contain information vital to your business, such as your profits and losses, a balance sheet, and a cash flow forecast.

Unlike statutory accounts which are produced annually, management accounts are produced on a monthly or quarterly basis.

This frequent reporting allows for up-to-date financial insights, enabling businesses to constantly respond to changes in the market environment in a proactive manner.

How can they help?

Management accounts can provide businesses with the financial data needed to make necessary adjustments in real-time.

It enables business owners to make strategic decisions based on concrete information rather than guesswork, which can help when investing, seeking finance or making a business more resilient during difficult times.

By focusing on detailed cost analysis, management accounts can also drive operational efficiency, a critical aspect during uncertain times.

They offer key insights into cost structures, making it possible to identify inefficiencies and areas of waste that can be targeted for cost reduction. This can ultimately lead to improved profit margins, better cash flow management, and increased financial resilience.

Although primarily designed for internal use, management accounts can also strengthen communication with key stakeholders.

If you would like more information about management accounts and how we can help you use them to strengthen your company’s financial outlook, please contact us today.

New research from wealth management firm Evelyn Partners has revealed that the majority of business owners with companies that earn more than £5 million annually are preparing for an exit.

With 65 per cent of UK business owners contemplating the sale of their company, and almost half intending to do so within the next year, the reasons behind these accelerated plans vary.

The primary motivator seems to be the looming General Election within the next 15 months, which has instilled concerns about a potential change in Government and consequential alterations to taxation. This political uncertainty has prompted a quarter of business owners to fast forward their exit plans.

Another significant reason for considering the sale of a business is the difficulty of accessing long-term capital and investment. Increasingly strict conditions for financing have pushed one in four to contemplate selling.

The complications surrounding post-Brexit trade arrangements and the effects of high inflation have also pushed many business owners to sell.

With inflation driving up the cost of labour, energy, and materials, about 23 per cent of business owners have chosen to sell their businesses for this reason.

Personal finance challenges also factor into this trend, as business owners look to liquidate the equity in their businesses.

However, about 36 per cent have chosen to delay their exit plans in hopes of obtaining a better price for their business.

The preferred exit strategy for these businesses is selling to private equity. In fact, 20 per cent of business owners are looking to sell to private equity, with 11 per cent of them aiming to sell a minority stake, while nine per cent are planning to sell a majority stake.

Employee ownership trusts are also gaining popularity, with 18 per cent of business owners considering this route.

Are you a business owner who has considered an exit strategy? Please contact us today to find out how we can assist you.

Small and medium-sized businesses (SMEs) have struggled to access finance from banks for a while, with many having to turn to alternative lenders and sources to secure much-needed funding for investment.

However, the scale of this issue has not previously been explored in significant detail until now. A new study has found that almost three-quarters of SMEs believe that their bank actively discriminates against them in favour of lending to larger companies.

Independent polling agency, Censuswide, surveyed 500 UK SME owners to explore whether they had access to finance and sufficient support from their bank.

Whilst the headline figure on lending is concerning, what stood out significantly was the seeming reluctance of banks to back SMEs’ plans for growth.

Perhaps that is why the initial headline figure on bank lending and support is so worrying to many business owners.

Need finance?

Higher interest rates and more cautious lenders have resulted in many businesses struggling to access funding, especially from banks, as this study has shown.

A traditional bank loan is only one means of obtaining the funding required to meet your investment plans and there are several other sources that owners can consider.

These include, but are not limited to:

• Venture capital investment, including tax-efficient EIS and SEIS funding
• Peer-to-peer finance
• Crowdfunding
• Pitch events
• Grants

Each of these forms of finance and funding has pros and cons that should be carefully considered.

If you are struggling to find funding for your business strategy it is important to seek professional advice to understand the various options available to you.

Speak to our team today to find out how we can help you with your plans for growth and investment.