According to research carried out for the Business Club, almost half of the 500 business owners surveyed admitted to being concerned at their ability to repay outstanding debt in the first quarter of 2011. The percentage of small businesses that had real concerns has risen from 34 percent in the final quarter of 2010 to 46 percent in 2011.
The number of businesses who are worried about debts owing to trade creditors has also risen from just 14 percent to 38 percent. The number of small businesses who have growing concerns regarding outstanding tax has risen to 41 percent, which is also an increase on the previous quarter. There are growing concerns that businesses should be prospering when monetary and fiscal policy are in their favour. When interest rates do start to rise, the companies will have to face the inevitable struggle of paying their debts.
The financial difficulties are more likely to be affecting small businesses rather than larger companies, with cash flow being one of the main problems. Almost a fifth of the businesses surveyed said they struggled to pay invoices in a timely manner, with 17 percent using the maximum overdraft facility available.
Small businesses are much more likely to try and manage the administration of their company themselves, rather than pay for a low cost accountants. Outsourcing to a small business accountancy can reduce the burden of mounting debts, with a financial strategy created for your business. Consulting a small business accountants can improve the long term viability of your company.
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