Accountants reveal business gloom

Date: 21st August 2008

A new survey from a group of accountants has revealed that there is a growing acceptance among small businesses that they must take action now to cope with the tough times ahead.

The latest Business Confidence Monitor from the Institute of Chartered Accountants in England and Wales (ICAEW) showed a six point decline in the last quarter.

Despite this, Robin Fieth, the ICAEW's executive director of operations and finance, said that most businesses were displaying "a new realism" about what they needed to do to survive the economic slowdown.

"As an increased number of businesses express concern over late payment, effective cash flow management is now more essential than ever for those sectors with rising input costs," he explained.

"We expect the slowdown to be at its worst towards the end of 2008 and into early 2009. We also expect inflation to start falling back from early 2009, allowing the Bank of England room to cut interest rates throughout 2009."

Recently, PricewaterhouseCoopers (PwC) told Accountancy Magazine that more and more companies are coming to realise the importance of tax planning, especially in the face of slowing sales.