As we prepare to enter a new year, businesses must take a moment to reflect on the last 12 months as they put plans in place for 2021.
For most businesses, the events of 2020 will have been completely unprecedented and how each company has reacted to this crisis will be unique.
However, out of the panic and strife of the last 12 months, certain things ring true for many businesses regardless of their size or sector.
Our team have taken time to look at the lessons we have learned and the changes within other businesses to create a list of lessons that we feel no business can ignore.
The importance of technology
With millions of people forced to leave their usual workplace and get used to working from home, companies have had to invest millions of pounds in new technology to ensure that it is ‘business as usual’.
Given this surge in investment and a change to the way we work, it is no surprise that around 80 per cent of businesses expect their IT and technology budgets to grow or remain steady in 2021, according to a new study by Spiceworks Ziff Davis.
Of the more than 1,000 businesses surveyed, 76 per cent said they plan on long-term IT changes as a result of COVID-19, while 44 per cent plan to accelerate digital transformation plans.
One of the key trends in technology investment has been the implementation of cloud technology. According to CompTIA’s annual trend list in 2021 ‘Cloud is King’ and it has become a key ingredient in any current IT strategy.
Cloud-based solutions have demonstrated they are secure and enable businesses to work remotely without significant investment in additional infrastructure.
Understandably, many businesses may be concerned about investing in uncertain times, but if the last year has demonstrated anything it is that those that innovate have a higher chance of success.
The value of grants and reliefs
For many smaller businesses, 2020 may have been one of the first years where they applied for and were successful in getting grants.
In many of these cases, these grants may have been linked directly to Government financial support to help them survive but hopefully it has taught many business owners an important lesson – grants are not to be feared.
At a time when access to traditional forms of lending are limited and businesses are desperate for additional cash, we have also seen an increase in interest in tax reliefs and allowances.
This can particularly be seen in the growing number of R&D tax credits claims from one year to the next, which appears to be rising again in the last tax year, as more than 50,000 businesses seek funding via this resource.
As organisations look to rebuild and recover in the years ahead, many will likely turn again to grants and reliefs as an alternative source of financing their growth – especially if other lenders are less willing to provide funding.
With so many changes in the last year, businesses have had no other option but to call upon professional help.
Top of most businesses help lists has been accountants, who have played a vital role in supporting clients with the various Government schemes, which has helped them gain access to billions of pounds of financial support.
It should come as no surprise then that research from Xero – one of the UK’s leading cloud accountancy platforms – found that most small businesses considered their accountant as an essential part of their business’s continued success.
The study showed that six in ten small businesses relied on their accountant during the pandemic for survival, while 45 per cent of owners said that their accountant is more important to them than ever before.
Highlighting the importance of technology, 63 per cent said that the systems employed by their accountant had been essential, which is why it is not surprising that a third of SMEs revealed that the pandemic led their accountant to adopt new forms of cloud-based technology.
Many businesses are now entering a period of recovery and it is clear that owners hope to build more resilient operations for the future.
It seems likely that many companies will now apply the lessons from the last year to their plans, which is likely to mean a greater focus on innovation.
Accountants too will need to invest further in technology to keep up with the expectations of clients in the years ahead.
We are likely to see a growing amount of automation as well, which should make it easier for businesses to seek out new opportunities, like grants and reliefs, by removing much of the burden of preparing claims or managing the day to day operations of their organisation.
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