Weathering The Recession
A recession is a challenge for any business, but it is a challenge that a good accountant can help you with
. Because the last major recession took place decades ago, many of today's managers have very little experience of how to weather a recession. Many accountancy firms have people working with them who worked through the last recession. At the very least, they are well trained to deal with the challenges a recession throws up.
A common mistake is for managers to focus 100% on surviving the recession, totally forgetting the company's long-term needs. They do OK at first, but fail to grow and go out of business within a few years.
It is important to realise that not all recessions are the same, and that you need to make financial plans to deal with the type of recession you are experiencing. The current recession will be longer and deeper than previous recessions. A double dip recession is quite likely. Getting credit is currently an issue and will remain so for many years to come. This means that a good cash flow strategy is especially important. Without a good accountant, you will not understand your company's cash flow or be able to implement strategies to improve it.
It is important to recognise that recessions are not all negative for businesses they actually represent a business opportunity. Your competition will slowly ebb away, as they fail to adapt, and you can take on their customers. You will also benefit from the fact that there are many talented, experienced people looking for jobs. In addition, recessions change what clients want or are willing to accept. This means that you can often develop new services that meet your client's new needs, opening up new previously untapped markets for yourself.
Regardless of the type of recession, firms who have a detailed understanding of their companies' finances will survive and thrive. Your accountant can help gain the understanding you need to survive and thrive.
by: Julie Steed.
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