Cash and debt are the biggest priorities for mid-sized Scottish businesses over the next six months, as companies prepare for an anticipated recession later this year.
Current market conditions are creating significant challenges for Scottish businesses, with managing cash flow an immediate priority for almost a third of companies (29%); with the same number stating that making loan repayments is top of their list.
Accountancy and business advisory firm BDO conducts a bi-monthly survey of 500 medium-sized businesses - defined as having revenue between £10m and £300m - with 51 Scottish businesses taking part in the latest poll.
Supply chain management and the Russian invasion of Ukraine pose the greatest threat to mid-sized Scottish businesses over the next six months, with nearly a third concerned about the ongoing impact of Brexit.
A further 59% of business leaders in Scotland are also worried they won’t meet sustainability targets within the next two years, due to increasing market challenges.
Martin Gill, head of BDO Scotland, said: “Businesses have dug deep and prioritised people and business longevity in the first half of 2022, which has set them up well – in the main.
“But the cost of living crisis cannot be ignored, and with inflation meaning that the cost of doing business is rising, it’s not surprising that almost a third of businesses are worried about their cash flow.
“Scottish businesses are taking the right steps to prepare for a tough winter by focusing on cash flow and taking steps to head off a crisis – however, concerns over the cost of doing business are likely to impact on companies’ forecasts as we move into the second half of the financial year.”
Supply chain issues were also of concern to a third of Scottish businesses.
Half of companies say they have proactively introduced new technology to support supply chain analytics, 31% have near-shored production and 35% have developed a full back-up supply chain as an alternative.
Others have hired more digital talent (22%), introduced dual-sourcing of raw materials (35%) and increased their inventory of critical components (39%).
Gill added: “As we enter the final part of the year, it’s vital that Scottish businesses are given appropriate support by political powers to help steady the ship and put companies in the strongest possible position.”
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