Accountants have been increasingly successful in persuading SMEs to re-forecast their financial performance in the second half of 2020, according to the year-end results of the ACCA and The Corporate Finance Network (The CFN) SME Recovery Tracker.

As the year draws to a close, the tracker results have shown consistently high levels of stress and anxiety among entrepreneurs running smaller businesses. The latest figures reveal that 52% are feeling more stressed and anxious than usual and a worrying 9.5% are feeling unable to cope.

In early June, only 27% of smaller businesses said they had completed a re-forecast of finances to take into account the effect of the global pandemic. However, in the following months, the figure rose to 49%, as accountants encouraged clients to take a fresh look at their financial prospects,

But the latest survey of accountants representing 3,805 clients shows worrying signs for SMEs, with only 15% of businesses being fully aware of their funding requirements and financial risk over the next six months.

The tracker also revealed concern from accountants that overwhelmed SMEs may not have made a plan to pay outstanding or deferred tax and VAT bills. The deferral is due to end in March 2021 and many businesses face being hit by unplanned debt.

Claire Bennison, Head of ACCA UK, said ‘It’s clear that many businesses have been in survival mode and deferral of tax and VAT bills has been a key factor.”

‘However, with Self Assessment payments coming in January, the deferral coming to an end in March, and VAT changes for those who trade with the EU, now is the time that they should be speaking to their accountant and planning to set up a payment plan with HMRC, for any outstanding and deferred debts.”

Kirsty McGregor, Founder of The Corporate Finance Network, said :It’s great to see that accountants have been on the case with clients over the past few months and have been successfully encouraging them to do a new financial projection for their business.”

“SMEs need to continue to focus on their future funding needs and their advisors will then be able to provide alternative solutions for their clients. With the Coronavirus Business Interruption Loan Scheme (CBILS) drawing to a close at the end of January 2021, businesses should apply now if they are eligible or speak to their accountants about possible options for other commercial borrowing, Time to Pay arrangements with HMRC or routes to restructure their business and overhaul their strategy.”