As the economic landscape for the UK continues to improve, more and more firms are looking past years of consolidation and towards growth instead. Firms large and small are looking more closely at their market positions, with accounting solutions helping to isolate strengths, weaknesses and opportunities.
This is the case at chocolate firm Thorntons, which has announced a refinancing deal.
In its fourth quarter statement last week, Thorntons revealed that its total sales for the year to June 28 were up by 0.7%. That follows no sales growth over the last two and a half years.
The refinancing by the firm sees it increase its lending capacity from £57.5m to £75m, which, according to a statement, will be used to:
“…support the continuing growth of Thorntons and its transformation into a fast moving consumer goods company with increasing sales to third party retailers.”
However, The Guardian reports that recent auditing and bookkeeping by Thorntons did reveal some unpleasant surprises, by the company’s own admission. It was found to have exceeded its lending limit on a number of instances over recent years; a timely warning to small businesses and larger organisations to ensure their accounts are in order.
There will be no penalties for Thorntons after the discovery of the debt limit being passed, with the refinancing deal being in place with the company’s existing bank.
One financial analyst, Peter Smedley, said:
“A breach of articles may well be taken badly by some investors, but we consider it more of a technicality given the banks’ continued support, commitment and actions to agreeing the new financing arrangements.”
It is a warning to other companies though, who may not be treated with the same grace, particularly if switching debt providers. Engaging with a respectable outsourced accounting service can help many SMEs stay out of such issues.
There are many ways in which outsourced accountancy benefits firms aside from compliance however, with putting plans for growth and expansion into action a key part to this end.
Expertise in the field can optimise turnover and ensure cashflow is in place to take advantage of opportunities, for example. Moreover, the additional time and resources that external professionals in bookkeeping and finance can bring is often underrated.
For Thorntons, the growth is being propelled by a shift in the company’s direction. It is reducing its retail outlets, for example, pushing more in supermarkets and looking to foreign markets to drive up its overall sales and performance.