Economic recovery after Covid-19 presents a clear and present danger reports accountancy firm Moore Thompson
The UK has begun to take important steps to the reopening of the economy, with many shops and hospitality venues finally given the chance to start trading again after months of restrictions, writes Matt Upex, partner at Market Deeping accountancy firm Moore Thompson.
There are signs of this success everywhere, whether in the falling levels of unemployment or the once quiet high streets bustling once again.
However, many businesses are not yet out of the woods. While many owners are enjoying income for the first time in more than a year, in many cases, cash flow remains constrained and many companies are now facing new bills from the emergency finance acquired by the Bounce Back Loan and Coronavirus Business Interruption Loan Scheme.
Although these were Government-backed and interest and payment free in the first 12 months, many companies just emerging from lockdown face finding a balance between repaying their loan, funding their recovery and recruiting new staff needed to rebuild their business.
For some, this challenge could put a heavy strain on their business and its finances, which may raise questions about the company’s future viability.
Earlier this month, a study by insurers Simply Business, conducted among 1,200 small business owners, found that the pandemic cost the average small business £22,461 in expenses and lost trade.
As a result, more than 840,000 small business owners aren’t sure if their business will ever return to pre-pandemic trading levels, according to the extrapolated figures from the study.
While the UK is enjoying an economic recovery, it is important that businesses continue to monitor their levels of debt, cash flow and creditors to make sure they have the means to survive and eventually thrive once again.
At times like these, information can be a very powerful tool. Management accounts, online accounting systems and the expertise of an experienced accountant can often be the difference between success and failure.
By working with a trusted professional, you can spot the signs of distress sooner, find new ways to diversify and grow your business and seek out additional finance if necessary, to fund new investment or keep a company afloat.
We have seen first-hand the impact that the pandemic has had on many businesses. We understand the pressures and difficulties that are unique to certain sectors and we, like many of our professional peers, are standing by to offer support to the local business community.
If you would like help with any of the issues that we have been highlighting, now is the time to reach out and speak to our team at Moore Thompson.