Debt Recovery Blog – The global economic recovery is over

Just in case there was anyone left on the planet who thought that the global economic recovery was slow, but nevertheless still happening, the largest ever survey of finance professionals to be undertaken by ACCA (the Association of Chartered Certified Accountants) has poured water on the last remaining ambers and sparks of optimism.

According to the ACCA survey any signs of a recovery in the global economy have disappeared and the report stresses that, while the economic situation is very tough, the constant flow of depressing headlines may be making finance professionals even more pessimistic than conditions actually justify.

75% of the near 3000 professionals who took part in the Global Economic Conditions Survey Sep 2011 thought global economic conditions were deteriorating or stagnating. Furthermore,  49% had lost confidence in the economic prospects of their own organizations and 45% thought their respective governments were not dealing correctly with current economic challenges.

ACCA believes that much of the drop in confidence and the extinguishing of the final sparks in optimism, especially in Europe and the Asia-Pacific region, is largely down to a constant flow of bad news rather than the underlying economic fundamentals, which have deteriorated yes, but not in line with the drop in confidence. Whether the metaphorical ‘economic recovery’ ship is actually going to sink to the bottom with all souls lost, or as per the implied ACCA belief, that the passengers are jumping ship into the life rafts too early, is anybody’s guess?

With all the mixed messages in the local, national and international media what is the belief of the Liverpool Debt Recovery firm, CCDR?

The viewpoint of nearly 3000 professionals in the accounting industry, whom first hand see the financial mechanisms at work for their clients’ businesses, shouldn’t be cast aside as mere pessimism. Accountants are neither politicians nor journalists and as such, their viewpoint is likely without agenda or spin and is more likely an honest appraisal of their client firms’ current trading positions and future prospects. As such, their opinions should be heeded.

Using the sinking ‘economic recovery’ ship analogy again, you could argue that accountants are not the captains, but the lookouts and acting as such, are uniquely positioned to see any rough seas ahead. Siding a little with ACCA it is perhaps a little too early to “prepare for the worst but hope for the best” as to do so would imply to brace for impact and take no further action. Advice, which if your business is still trading solvent, is somewhat premature.

Manos Schizas, senior policy adviser with ACCA and survey editor, said:

“The drop in confidence could be seen as a result of people waking up to trends which have accumulated for the past year or more. Globally, demand has proven to be too weak to sustain reliable growth, investment refuses to pick up and inflation remains high. And on top of everything else, it’s still unclear whether the sovereign debt crisis in Europe can be contained, or indeed what it will mean if it cannot,”

It is prudent for all businesses, small, medium or corporate to trade as lean as possible, reduce waste and in doing so, improve your firms’ ability to weather economic storms. Areas such as late payment problems and their direct affect on cash flow (which are still the joint biggest killer of company failures) should be high on the company agenda. Whilst reducing waste and improving efficiency are sound advice in becoming a lean business, they are out of CCDR’s scope. Getting your business paid on time is not.

For more details on getting your invoices paid and/or services like Debt Recovery, Outsourced Credit Control or if you need help locating gone away debtors with our Debtor Tracing services, Corporate Credit Debt Recovery are backed up with the commercial experience to reduce your debtor days and we have an impressive client portfolio to back up our results.

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