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Back of an envelope

1 November 2023

In today's uncertain economy post-Brexit and amid COVID, effective business planning is essential. Scribbled notes won't suffice. Use low-cost, cloud-based accounting software and forward thinking for profitability and survival.

Instead of planning for your business on the back of an envelope, read on to find out ways to improve.

When the economy is vibrant (there are many buyers in your marketplace) cash flow and profitability to look after themselves. Only as long as you’re selling your goods or services at a price that covers your overheads and drawings/dividends.

Unfortunately, since Brexit and COVID disruption and the current upward pressure on energy and raw material costs, buyers are more circumspect about purchasing and business profits and cash flow are under pressure.

In which case your business planning cannot, and should not, be restricted to a few notes scribbled on the back of an envelope.

Your current management accounts should show you what your current situation looks like:

  • are you making profits;
  • are you keeping within your overdraft limits; and
  • are you still solvent.

To answer these questions the use of low-cost, cloud based accounts software is the minimum you should be utilising.

A belts and braces approach should include forward planning, what will be your likely profitability, cash flow position and solvency look like in a year’s time?

If you need help maximising the use of software to achieve these basic planning objectives, or if you would like advice on business planning issues, please call. We can help you be prepared to deal with and survive the UK’s present economic challenges.

Source: Other Wed, 01 Nov 2023 00:00:00 +0100

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