Holden Associates – Accountants & Business Advisers Blog

The economic future is looking more uncertain than it has done for many years. Forecasting sales, profits and cash flow is becoming increasingly difficult. Even so there still remains a need for many businesses to attract funding in order to achieve sustainability. Keep running. If you are seeking funding for your business thorough preparation is essential because of the cautious approach that is now being adopted by banks and financial institutions.

Seeking funding for your business often means that your business processes and procedures will need to be placed under a microscope and examined very closely before any decision can be made. One of the things that you may want to think about before approaching a funder is your current, medium and long term funding requirements. In essence you will need to be acutely aware of what your business will require and when.

Does your business have a contingency plan or a risk management strategy? These might sound like additional work but they can be the difference between successfully securing funding and walking away empty handed. Having a sound business model that is easy to understand and manage is key to running a successful business. A complex business model that is difficult to understand could be a barrier between your business and much needed funding.

The relationship between an accountant and your business is vital. An accountant should be becoming increasingly valued the deeper the UK sinks into the credit crisis. However, it is still surprising just how many businesses operate without any professional support behind them and only call upon their services for end of year requirements.

Since there is no light at the end of the tunnel for this latest crunch, many small businesses will simply bury their heads in the sand, hoping that one day their business fortunes will pick up – unfortunately, this will unlikely happen anytime soon.

It is therefore critical that businesses should know what or whom to turn to in order to survive in this climate:

• Keeping your accountant fully updated will help them provide valuable guidance and support.
• Maintaining up to date accounts are vital to understand the current finances of your business.
• Try to keep up to date with payments, especially Tax, PAYE or VAT – it’s easy to get left behind.
• Maintain a good relationship with your bank and keep them informed of any cashflow problems. They will more likely be willing to help if they are assured your finances are up to date.
• Never tie up all your money and ensure you have at least 2 months working capital in the bank.

These are just some simple rules to follow to give your business the tools it needs to survive. Most importantly – if you don’t have an accountant, get one!