Pictured above: Nigel Reyolds
Birmingham accountancy firm, Reynolds and Co is warning more
West Midlands businesses could fail coming out of the recession,
than compared when entering it in 2009, due to over
trading.
Reynolds and Co is concerned businesses could become their own
victims in the post recession recovery, as businesses continue to
take on more business, than they have the cash or staff capacity to
accommodate for to service.
It claims the fear of losing business has put regional business
owners in the uneasy position of accepting every contract of new
business, which can be found or won.
"We are finding more businesses in the region are pitching for
as many projects as they can find, only to realise they do not have
a strong enough cash flow to finance this. We are seeing cases
where businesses have too much money tied up in stock and debtors
and are unable to access more finances to pay suppliers or
staff.
"As we come out of a recession it is more important than ever
that regional business owners are making the right business
decisions, as it could secure their fate", said Nigel Reynolds,
Principal and founder of Reynolds and Co.
Mr Reynolds, is warning business owners in the region to ensure
they have a well drafted business plan together with tight
financial control, and the support of a Bank or trusted
accountant.
He said: "In addition although it is difficult to do, business
owners in Birmingham will need to consider very carefully whether
to turn away some business, because they cannot finance or
accommodate with service. Having survived the recession it will be
difficult for business owners to do this, but if they fail to do
so, then they could run the risk of losing their company
altogether."
Manos Schizas, Policy Adviser at ACCA's (the Association of
Chartered Certified Accountants) Small Business Unit, backs Mr
Reynolds' comments.
Manos Schizas, said: "This is a very real danger - it is easier
to go out of business in the early days of economic recovery than
at the bottom of a recession, simply by running out of cash.
Planning is essential, and regular checking of cash flow will help
the situation not only in terms of internal finance but also when
approaching lenders."
Reynolds and Co specialise in accountancy (including Solicitors'
Accounts Rules), taxation and business advisory services. This
includes Management and Business Services, Business Start Up
Support, Tax Management and Tax Returns Support, IT Support and
Payroll and Booking Keeping Services.
The firm is also a member of the ACCA, the largest global body
for professional accountants - with 131,500 members of the
accredited body across the World.