The next two years is a make or break period for companies, and the way managers’ respond to the downturn will determine winners and losers for the next decade.

During a recession, it is noted that company performance is much more variable than during boom years. A study by Deloitte has revealed the extent of this variation, as much as 27% during bad times – compared to just 8% variation when the economy is good.

The study concluded that the spread of returns was so wide during recessions is reinforced by decisions taken by managers during difficult periods. Managers that focussed on securing financing, managing cash and controlling costs were able to effectively shepherd their organisations out of danger.

It is clear that management are being much more careful these days, however, taking shortcuts by attempting to do work in house that should be left to experts is one mistake that could prove costly. Recently we have been finding a lot of small companies are coming to us with their manual accounts in a bit of a pickle, this causes a couple of issues. Firstly, it is very difficult to make informed business decisions when cashflow is uncertain, secondly, when you send those accounts to your Accountant, it will take much longer for them to do the work – and at £60+ per hour that is a lot of money! A good Bookkeeper will charge around £20 per hour and can save hundreds of pounds a year by preparing accounts prior to the Accountant finalising them.

Related posts:

1. £50m extra funding lines open for firms
2. SMEs ‘must show financial transparency’