SMEs and the corporate world - marked differences in approaches to business planning, credit terms and cashflow

Sharp distinctions in approaches to managing cashflow and business continuity planning by SMEs and the corporate world are revealed in the latest edition of the ACCA UK and The Corporate Finance Network (The CFN) SME Recovery Tracker.

Closing on the 29 July, the results show that 86% of accountants in the corporate sector have business plans and financial forecasts in place, with the majority reviewing these regularly on a weekly basis.  Just 35% of SMEs have a business plan, showing that credit terms and business continuity between these two sectors are being handled in very different ways. 

Despite recent announcements from the UK government about returning to the work place, some 33% of SMEs are still concerned about opening their businesses with current social distancing rules in place, while the corporate sector’s responses show just a fifth are unconfident about returning to work, with 47% saying they are very confident.

Since the start of the Tracker, tax deferrals have been a cashflow management choice for SME clients, and the latest results for the last two weeks show 70% have made this decision, with 58% of those saying they can make their tax liabilities in six months’ time.

Corporate respondents reveal where investment has been made with employees in their organisation, with a strikingly low 7% saying their organisation has management training in place for remote coaching and leadership. However, 47% say additional IT equipment has been made available.

Kirsty McGregor, founder of The Corporate Finance Network says: ‘The corporate world is recognising the importance of cashflow planning and this is something SMEs can also embrace nowadays with the cloud and digital tools which are available and make this far easier than in previous recessions. Couple this with professional advice from accountants, SMEs can work towards creating a more resilient business. We know this is a massive challenge, but help is out there and supporting the accountants in this work is the sole function of our joint campaign across the profession to #LeaveNoBusinessBehind.’

Claire Bennison, head of ACCA UK adds: ‘In some ways, the different approaches to business planning between SMEs and corporates can be understood, but there are lessons to learn from each other here. Working with digitally adept accountants means SMEs will get the advice they need about how to balance the books, to stabilise their business models and plan ahead. However, sentiment shows that recovery appears to be unpredictable for SMEs - and this is alarming.’

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Helen Thompson
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Notes to Editors:
About the ACCA UK and The CFN SME Recovery Tracker:
This edition has sought views from accountants working in practices advising some 5,000 SME clients. The poll closed on the afternoon of 29 July 2020.

About SMEs: SMEs, (typically less than 250 employees), account for 99.9% of the private sector employment in the UK and there are 22 million employees working for these private sector businesses.

About ACCA: ACCA is the Association of Chartered Certified Accountants. We’re a thriving global community of 227,000 members and 544,000 future members based in 176 countries / locations that upholds the highest professional and ethical values.

We believe that accountancy is a cornerstone profession of society that supports both public and private sectors. That’s why we’re committed to the development of a strong global accountancy profession and the many benefits that this brings to society and individuals.

Since 1904 being a force for public good has been embedded in our purpose. And because we’re a not-for-profit organisation, we build a sustainable global profession by re-investing our surplus to deliver member value and develop the profession for the next generation.

Through our world leading ACCA Qualification, we offer everyone everywhere the opportunity to experience a rewarding career in accountancy, finance and management. And using our respected research, we lead the profession by answering today’s questions and preparing us for tomorrow. Find out more about us at www.accaglobal.com

About The Corporate Finance Network: The Corporate Finance Network – www.thecfn.org.uk - The Corporate Finance Network consists of some of the most proactive and commercially astute regional, independent accountancy firms in the UK. They specialise in providing corporate finance advice for smaller transactions.  Kirsty McGregor can be contacted at info@TheCFN.org.uk




"In some ways, the different approaches to business planning between SMEs and corporates can be understood, but there are lessons to learn from each other here. Working with digitally adept accountants means SMEs will get the advice they need about how to balance the books, to stabilise their business models and plan ahead. However, sentiment shows that recovery appears to be unpredictable for SMEs - and this is alarming."

Claire Bennison - Head of ACCA UK

"The corporate world is recognising the importance of cashflow planning and this is something SMEs can also embrace nowadays with the cloud and digital tools which are available and make this far easier than in previous recessions. Couple this with professional advice from accountants, SMEs can work towards creating a more resilient business. We know this is a massive challenge, but help is out there and supporting the accountants in this work is the sole function of our joint campaign across the profession to #LeaveNoBusinessBehind."

Kirsty McGregor - Founder, The Corporate Finance Network (The CFN)