05/05/2011
Small and medium-sized enterprises (SMEs) are right to show caution when spending, despite the British economy looking positive.
That's according to KPMG, which confirmed that although businesses could be forgiven for wanting to ''splash the cash a little," if they did so, they could find themselves over-spending and putting their company's finances in danger.
Management Today reported on the findings, which found that the majority of companies had found a healthy budget to work to, and that if they reverted to over-spending or previous spending habits, they could lose some £90 billion overall.
By working to a controlled budget, and spending money on the right things - such as recruitment and further growth - companies could keep themselves on track. Despite this recommendation, KPMG found that some 80 per cent of companies were finding it difficult to grow due to their finances.
However many owners look to services such as factoring to free up cash for reinvestment. This is a great way to keep the business growing and developing, without having to take out credit agreements or loans.
A spokesperson for KPMG, Martin Scott, spoke out about the findings. On CFOWorld.co.uk, he advised businesses of all sizes to "redouble their cost management efforts" to ensure their business continued to grow and their finances were kept looking healthy.
Deborah Bates