A strategic role: Helping your clients plan for uncertainty

Global uncertainty is here to stay, so how can businesses minimise disruption?

Businesses are dealing with global and market uncertainties as a matter of course these days. Trump’s international tariffs, changes in government policies, tax increases, extreme weather events, war and conflict all have the potential to disrupt business operations.

Disruption from the Covid-19 pandemic saw many businesses pivot into different markets and products. Others used it as an opportunity to revisit their business models and review their own operations and practices. But while the pandemic is behind us, the propensity for future business disruption – whether on a global scale or more localised – remains high due to our VUCA world [volatility, uncertainty, complexity and ambiguity].

Business owners need to have plans and policies in place to manage and mitigate potential business threats. It’s impossible anticipate every eventuality, but scenario planning and forecasting activities are now crucial. Planning for uncertainty therefore needs to be high up in the priority list.

Accountants play a huge role in supporting their clients to adequately prepare for uncertain times. Advice and actions might include:

• regularly monitoring cash flow
• monitoring global markets to be aware of developing issues as early as possible
• scenario planning to explore different outcomes
• reverse stress testing to help identify the possible outcomes of potential disruption
• investigating alternative revenue streams.

So how, specifically, are accountants helping their clients plan for and deal with potential business disruption?

Harness proactive planning and utilise real-time insights

Becki Roberts, Accounting and Business Services Director, Nottingham office, UHY

Clients are currently most concerned about inflation and interest rate volatility, as rising costs and borrowing rates are placing significant pressure on profit margins. Supply chain disruptions also remain a key issue, with global instability continuing to affect the availability and pricing of goods.

Additionally, labour shortages and wage pressures are a major concern across many sectors. Businesses are struggling to recruit and retain talent, while increases in the minimum wage and national insurance are further tightening margins in some industries.

Our approach

Our advice is rooted in proactive planning and harnessing real-time insights. We encourage clients to embrace cloud accounting tools, such as Xero, which provide instant access to financial data and support faster, more informed decision-making.

Cash flow forecasting is essential. We work with clients to build rolling forecasts that adapt to changing conditions. We also work closely with clients on scenario planning, helping them model potential economic outcomes such as interest rate hikes, so they can prepare robust contingency plans.

We’re supporting our clients by leveraging cloud accounting platforms to deliver real-time financial insights, track key performance indicators, and provide tailored management reporting. Our advanced forecasting and scenario modelling services help clients simulate various business situations, enabling them to make confident, data-driven decisions.

In addition, we offer training and support to ensure clients fully understand their financial position and feel empowered to take appropriate action when needed.

Verdict: We advise proactive planning and utilising real-time insights.

Keep an eye on costs but don’t get distracted by short-term issues

Reme Holland, Financial Planning Partner, Albert Goodman

It feels as though uncertainty is everywhere at the moment. Inflation, interest rates, the economy as a whole.

Cash flow and the ability to make sustainable profits are at the forefront of clients’ minds. The current uncertainty around tax and the increased cost of doing business too, has put a strain on plans.

A lot of clients like to make contributions to their own pension funds via their companies. Following the increase in costs brought on by the National Insurance changes, these have been reduced in some cases and will impact retirement pots.

My advice? Stay attached to the detail. Cash flow is so important. If business owners have a clear exit or retirement strategy, keeping a close eye on costs and ensuring they are paying themselves is key.

Clients need to ensure they are always keeping an eye on long-term goals. Short-term issues will always be short-term. So don’t get caught in short-term thinking or allow best-laid plans to be derailed.

During times of uncertainty, it can be difficult to make decisions, leaving clients uncertain about which path to take, and even what options are available. This is why the annual review for clients is so important: using cash flow tools and being present for thorough discussions can help put focus on key areas and aid with decision-making.

As a company, our goal is that clients leave conversations with us feeling secure, informed, comfortable and even confident in their decision-making.

Verdict: We advise clients to keep a close eye on costs but not to get distracted by short-term issues.

Assess possible effects of policy changes with regular dynamic reviews

Vipul Sheth, Chartered Accountant and MD, Advancetrack

Clients have real concerns over how anti-business current government policies are and how quickly change is being brought about without consultation.

We’ve already seen alterations in National Insurance Contributions and Minimum Wage rules – something that has added thousands to a typical clients’ outgoings. The Chancellor has repeatedly refused to rule out tax rises in the Autumn and clients are concerned that any increase will be aimed squarely at businesses, at a time when they should be focusing on growth.

Strong financial forecasting is essential to help businesses withstand rising costs and potential shocks. The best, most nimble businesses will be carrying out dynamic reviews constantly to assess how a change in tax policy could impact their business.

There’s also the ongoing geopolitical uncertainty too, which can add a cost to a business – and I’d always recommend working side-by-side with a qualified accountant or tax advisor to get that consultative advice early on.

Businesses can’t prepare for every scenario, but those that try to stay ahead of the game will come out on top.

Verdict: We advise carrying out regular dynamic reviews to assess how a policy change or other uncertainty could impact the business.

Would you like to contribute to future articles like this one? If so, please get in touch with Annie Makoff-Clark at [email protected].

Annie Makoff is a freelance journalist and editor.