Related Articles

Commercial property use classes explained

Harness the power of LinkedIn

What the UK Government defines as micro and small business communities (less than £440,000 turnover and 10 or fewer employees) constitute approximately 60 per cent of all companies registered at Companies House, plus there are the tens of thousands of sole traders and partnerships in Britain. So, it is no surprise – and indeed it is good news – that the Government is looking at how it can help small businesses play their part in steering the nation away from an economic abyss.
An example of this is Simpler Reporting for the Smallest Businesses, a set of outline proposals instigated by the Department for Business Innovation & Skills (BIS) that, if these go ahead, would result in large-scale changes in the way small businesses in the UK are obliged to manage their financial reporting. Areas it looks at include:
The idea of simplifying the volume and complexity of financial reporting on the face of it may sound appealing. I am sure I can hear some business owners raising a cheer. And sure, some of the ideas set forward do have some merit, but we are not alone in having some concerns about these proposals.
Of course there are reporting and operational issues impeding growth, but we think these issues are qualitative, not quantitative. UK businesses need better reporting, not less. So, the proposals miss the real point, and I believe could be detrimental.
We believe that the information requirements of management should be the primary driver of business record keeping.“We believe that the information requirements of management should be the primary driver of business record keeping. In order to effectively run a business, to maximise the return on investment and to ensure that adequate funds become available as required, management need to have an awareness of the amount and timing of outstanding debtors and creditors and of the value of capital tied up in stock.”