Should accountants in London prepare for another recession?

Contractor accountants may be interested to learn that the National Institute for Economic and Social Research has suggested that the UK may be slipping back into recession.

The NIESR says there is a 70% chance that we will see another recession if countries don’t stop muddling through the current crisis in the Eurozone.

More worryingly, the body claims that the UK still faces a 50% chance of dropping back into recession even if the European crisis is settled.

NIESR director, Jonathan Portes, said both investors and consumers are demonstrating a weakness in demand, but the biggest risk comes from the crisis in the Eurozone. We are seeing a negative impact from the coalition’s strict fiscal policy and this should be relaxed slightly in order to encourage growth.

Meanwhile, the late payment problem continues to blight the UK’s small businesses.

The latest survey from Bacs shows that SMEs are now owed £33.6 billion in late payments; the largest amount since the organisation started its survey in September 2007.

Some accountants may have noticed that their clients are owed an average £39,000 and worse still, they are waiting longer than ever for settlement.

50% of SMEs in the UK and suffering from late payment and in many cases they are waiting 28 days longer than the original settlement terms. Large companies are still the worst offenders, whilst government departments and not-for-profit organisations are generally amongst the quickest payers.

55% of credit controllers get told their invoice is waiting to be authorised and a similar percentage are told it is being processed. 41% of late payers still claim that the cheque is in the post.

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