Firms fail to seek financial advice

Small Business News

More than a third of small businesses did not seek external financial advice in the 12 months to October this year, despite the economic downturn, according to the Forum of Private Business (FPB).

The FPB survey highlighted that 36% of small firms have not sought advice from banks and accountancy firms. 10% of those firms had not done so because they received poor advice in the past, while 14% cited a lack of faith in the adviser’s knowledge. FPB spokesman Phil McCabe said:

“Whoever they go to for advice, whether that’s a dedicated bank manager or an accountant, it is important to have a regular professional opinion on the best way to use their money,”.

“The risk is that businesses will fold if they don’t get regular advice on how to control cashflow and how to access finance, but this is particularly important at this difficult time,” he added.

The survey also highlighted that while 70% of small firms would ask an accountant for advice, only 47% would turn to a bank manager. The Association of Chartered Certified Accountants (ACCA) stressed the importance of businesses maintaining communication with an adviser, so they gain a better awareness of their finance options. ACCA SME policy team spokesman Manos Schizas said:

“Even if you don’t have the resources, an accountant is not just an adviser but part of a broader network that will help you with finance and business opportunities. Where business survival rather than just profit is at stake, firms will find it is well worth paying for impartial advice that is tailored to their business,”.

“Firms should look at their own financing cycles in which they get paid and pay their suppliers, and that will dictate the frequency with which they need to visit an adviser to ensure their finances are robust. Leaving it a year is too long for any business.” he added

We have information on finding an independant financial advisor , or you can visit our finance and money section, for more financial topics.

To find an independent business advisor in your area, visit the ACCA website