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Sunday, November 10, 2024

The Biggest Accounting Challenges for UK Businesses in 2024: And How to Resolve Them

Last updated Friday, October 25, 2024 11:06 ET , Source: James Todd and Co Accountants

Chartered Accountants and Audit Specialists shares how UK businesses can tackle cash flow, HR, sustainability, and tech challenges in 2024

Chichester PO20 2EW, United Kingdom, 10/25/2024 / SubmitMyPR /
The Biggest Accounting Challenges for UK Businesses in 2024: And How to Resolve Them

As we consider the ramifications of further tax reforms and their impacts on companies throughout the UK trading sectors, it's important to note that changes in tax legislation are just one issue—and far from the only pressure point—that requires targeted, strategic financial and accountancy advice to navigate. Effective bookkeeping services also play a crucial role in ensuring businesses stay on top of their financial records and remain compliant with evolving regulations.

Some of the most prevalent current problems facing British businesses relate to HR and recruitment, tackling the ever-evolving array of cybersecurity and data threats, and keeping pace with new technologies changing the competitive landscape in many industries.

The commercial accounting specialists at James Todd & Co. examine some of the pressing concerns and most common issues it handles in partnership with its clients and provide some advice about the best approaches.

Finance-Focused Issues for Companies This Year

Following months of soaring interest rates, record-high borrowing costs and economic volatility, one of the obvious problems for many businesses has been managing their cash flow, since the early indications of financial hardship are almost always around liquidity.

Depending on the level of strain on your cash flow, the best and most immediate responses might include:

  • Looking at ways to contain costs and reduce non-critical outlays.
  • Taking advantage of pauses in repayments or restructuring commercial borrowing and debt.
  • Postponing capital expenditures or investments temporarily.

While interest rates have now started to come down and the most chronic price pressures are easing, the costs of trading have far from subsided to levels seen before the pandemic and subsequent cost-of-living crisis, and in some sectors, pay deals and industrial action have made dramatic impacts on long-term payroll costs.

We've seen a gradual reduction in more extreme cost-cutting measures, but we recognise that many companies remain less confident that they will see revenues and profitability return to previous norms. Therefore, efficiencies, optimal productivity, and visibility of all outgoings are key.

Dealing With Trends and Focuses on Sustainability

Particularly in larger corporations and public and private entities, shareholder and broader stakeholder priorities have shifted.

Many companies are now being affected by requirements around Environmental, Social, and Governance (ESG) reporting and the need to showcase transparency around factors like responsible sourcing, carbon outputs, and ethical international production.

Regulatory changes and mandatory disclosures are also meaningful, as companies are called upon to verify their sustainability credentials, particularly relevant for brands whose consumers or audiences make conscious buying decisions against a backdrop of several very public cases of 'greenwashing'.

Handling Expenses for Devolved Workers

Adjustments to workforce legislation mean more companies are obligated to consider flexible working requests, with additional reforms expected or forthcoming. While hybrid and remote working are far from new, one of the financial impacts is a considerably more complex expense function. This is where many businesses need a professional bookkeeper to manage the intricate details of travel expenditures, home office claims, and other related expenses efficiently.

Companies are managing travel expenditures as, in some sectors, more staff return to offices, but they also need to introduce new policies and protocols to manage claims from colleagues working solely or primarily from home.

There are further issues around data protection, the use of personal or BYOD (bring your own device) systems, claims for allowable home office expenses, and finding good ways for supervisors and managers to monitor the outputs and productivity of devolved workforces with much less in-person contact.

Designing and enforcing robust policies and ensuring absolute clarity about the businesses' position regarding hybrid, remote, and flexible working is key. Guidelines must also be followed when considering employee requests for different working structures.

Human Resources Challenges Prevalent in 2024

Moving onto workforces, one of the big pressures we've encountered countless times is the need to hire talented employees and foster job satisfaction while also retaining high-calibre candidates and building a strong, reliable workforce.

Keeping a valued employee and offering routes to progression is a key objective, but many businesses find this difficult, especially when managing high overheads and juggling budgets.

For some businesses, introducing lower cost but highly valuable non-remuneration incentives like funded training and formal qualifications is a great resolution, although much may depend on the need for continual education in the workplace and how receptive employees might be to splitting their usual workload between study or mentoring and their normal tasks.

There are more specific problems in other niches, especially where private sector enterprises work in competition with public sector organisations, given the—in some cases—very large pay awards and backdated bonuses agreed in settlement with the government following prolonged industrial action.

In these cases, there is no simple resolution, but HR teams and boards may need to carefully consider what they can afford to pay, the risks and potential benefits of role-specific or more sweeping increases, and how a higher payroll cost might translate into better productivity, outputs, or revenues.

The Tech-Related Commercial Challenges Relevant to Current-Year Trading

Finally, we’re also seeing varied impacts of artificial intelligence and machine learning applications and algorithms, the effects of rapid and sometimes vast changes in the cybersecurity landscape, and the way businesses need to adapt to comply with ever-more-rigid data protection regulations.

AI itself has both positive and negative ramifications in many trading sectors.

Possible outcomes include the opportunities to introduce wider automation to minimise manual errors or replace repetitive data input tasks and use intelligent programming to ease up staff workloads so that they can focus on more profit-generating activities.

However, as cloud-based accounting software, intelligent forecasting, and data analytics offer benefits to many companies, the advancements of AI are also being seen in data attacks and cyberthreats, where companies need to work much harder to reinforce good practices, avoid social engineering, and keep sensitive and commercial data protected.

Like most of the challenges discussed here, our guidance would depend on the client’s circumstances, but the best strategies are often interlinked.

For example, addressing issues around remote working, combined with policies and protocols to safeguard company data and access rights stored within an employee’s home-working device, can go hand in hand with developing expense guidelines and updated internal controls.

Read more about James Todd & Co - Hospitality Accounting Specialist, James Todd & Co, Advises Sector Firms to Take Action Ahead of Legislative Changes

About James Todd & Co

James Todd & Co have been providing accounting services for more than 30 years across Chichester, Fareham, and Portsmouth for businesses across the South East. Their clients trust them to provide bookkeeping, financial auditing and compliance, management accounting and financial advisory services.



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Source Company: https://www.jamestoddandco.co.uk/



Original Source of the original story >> The Biggest Accounting Challenges for UK Businesses in 2024: And How to Resolve Them