Owner operators urged to review business plans and protect cash flow
BUSINESSES must prioritise cash flow management and ensure they have access to sufficient levels of funding as the coronavirus second wave tightens its grip, leading accountancy firm Johnston Carmichael has advised.
As England enters another national lockdown and Scotland faces ongoing uncertainty amid the pandemic, businesses are being urged to review their business plans and financial forecasting to mitigate the risks from further economic disruption and ensure business resilience.
Scotland has adopted a five-tier system of restrictions, but the Government has not ruled out a national lockdown.
Alan Hamilton, corporate finance director at Johnston Carmichael, who spent 15 years in the banking sector, said:
“Business resilience planning has never been more important. As lockdown measures continue to change across the UK, we’re working closely with clients to help them review their operations fully and adapt where necessary.
“Scenario planning is crucial to help be prepared for the unexpected – including the possibility of another full lockdown north of the Border. Even if Scotland escapes further measures, the English lockdown could have an adverse impact on the supply chain.
“Businesses must consider carefully, the impact of tightening restrictions on them and whether further economic uncertainty will create any potential funding challenges. In the current climate it’s not unthinkable that businesses could see demand change very quickly if they have to reduce or even cease trading as a result of lockdown measures. Conversely, some operators may benefit, such as that experienced by cafes recently when many hospitality businesses had to temporarily close.
“It’s important that management teams look in detail at the available options to help generate the cash needed to support their business through this time. Robust planning will also to build a stronger business that’s fit for the future and ready to take advantage of growth opportunities as the economy starts to recover.”
As Scotland’s largest independent accounting and business advisory firm, and a top 20 UK accounting firm, Johnston Carmichael has played a significant role in supporting businesses through the pandemic. In addition to offering a dedicated online coronavirus hub it also uses its social media platforms to share free advice.
The firm has seen an increased uptake of cloud accounting and digital solutions to reduce face to face interaction, and Alan Hamilton urged businesses to ensure they fully utilise the data available to them.
He added: “I’d encourage businesses to make the most of their digital resources as having access to real-time information through technology, allows business owners to make informed decisions based on real-time facts.”