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Strength in Numbers
Listed under: Retail Clinic
Published: Thursday, January 03, 2008
Your business accounts can give important messages to suppliers – so use them to your advantage, says Fred Edwards
“Filing accounts is much more than just an administrative burden, it’s an important communication opportunity,” explains managing director of financial advisers myFD Fred Edwards. “SMEs in particular should use their company accounts to communicate positive messages to suppliers, from whom getting credit is critical to their survival. Smaller retailers are likely to find it much harder in 2008 to maintain favourable and competitive credit terms from suppliers, many of which are much bigger businesses that might decide it’s just not worth risking supplying a company that doesn’t look secure. Given the adverse press comment about the retail sector as a whole, it’s possible that credit insurers, who are critical influencers of the larger wholesaler’s decisions about who they extend credit to, will unilaterally downgrade retail credit ratings across the board. This will hit smaller retailers particularly hard,” he adds.
Trading figures for December are particularly important, comments Fred. “Suppliers will want to know how strongly their customers have performed over the Christmas period so smaller retailers especially should make sure they can give a credible account of this quickly and by March at the latest, even if they haven’t actually filed formal accounts,” he explains. “In the case of key suppliers, it’s even worth sending them a copy of your full accounts as you would to corporate stakeholders; they’re likely to be at least as important to the success of your business.
“In the meantime, make sure that all costs to be accounted for by the end of January are included and that if, for instance, you intend to pay a dividend or a management charge then this is formally minuted. Get your accounts in order and audited during February and March and then you’re ready to release formal accounts when it suits your business, along with any accompanying information that supports the messages these give to your key audiences and stakeholders,” he concludes.
Trading figures for December are particularly important, comments Fred. “Suppliers will want to know how strongly their customers have performed over the Christmas period so smaller retailers especially should make sure they can give a credible account of this quickly and by March at the latest, even if they haven’t actually filed formal accounts,” he explains. “In the case of key suppliers, it’s even worth sending them a copy of your full accounts as you would to corporate stakeholders; they’re likely to be at least as important to the success of your business.
“In the meantime, make sure that all costs to be accounted for by the end of January are included and that if, for instance, you intend to pay a dividend or a management charge then this is formally minuted. Get your accounts in order and audited during February and March and then you’re ready to release formal accounts when it suits your business, along with any accompanying information that supports the messages these give to your key audiences and stakeholders,” he concludes.
