Growth is on everyone’s minds — but did the Autumn Statement really help?
There are nuanced benefits for businesses, but intelligent analysis and strategic investment in technology is what will truly drive growth and innovation, writes Soldo’s CEO Carlo Gualandri
In November I was joined by a series of business leaders to discuss the economic impact of the Autumn Statement.
In what has been a challenging year, there is cause for balanced optimism. As keynote presenter David Owen, chief economist at Saltmarsh Economics opened the event with: "Balance sheets are strong overall and more companies are able to work around Brexit, making a recession unlikely."
But building long-term sustainable business needs investment, and investments in technology are widely regarded as the accelerator of change.
With a general election looming, and the Government keen to kickstart growth, the Autumn Statement was always likely to deliver some good news for business. There were over 100 measures announced to support growth, so we tried to tackle the three most pertinent questions facing UK businesses and offer an insight into how businesses themselves are arming themselves for growth next year.
Can businesses be excited by the Autumn Statement?
The headlines may have been around full expensing, but at a time when resilience and stability have never been more important, who was it really helping?
Full expensing applies mainly to plant and machinery — and will predominantly please large businesses with money to spend. Tax relief and extra investment were targeted at R&D-intensive businesses and advanced manufacturing.
But it was a budget that was as notable for what it didn’t include as for what it did. Full expensing didn’t cover intangible assets such as intellectual property and software licences, which would account for much of the investment made by digitally led businesses.
What has become clear is that businesses of all shapes and sizes must invest time and brainpower into looking at the way they currently work. Where are the current bottlenecks? How effectively do teams collaborate? Which processes are ripe for streamlining?
One answer to that is to ensure they have complete visibility over company spending. At a time when incentives to grow are in place (at least at a surface level), having a single source of spending truth will never be more valuable.
Growth vs productivity — are they mutually exclusive?
As businesses look to plan for 2024, the one constant in everyone’s minds will be that staying still is not an option.
On the one hand, all the talk is about productivity. The common element that increases productivity is investing money and time in the way you work and how it can be done better. Not about vendors selling you a silver bullet.
On the other hand, growth will come from being innovative — something that comes from the inside, asking yourself what tools can you bring in to help; productivity doesn’t emerge naturally, it comes from an understanding of the need to change.
As Baron Anyangwe, finance director at Love Cocoa pointed out: “Growth is any impact you can have on your customers, stakeholders and environment. It forces you to think creatively — sitting still is draining cash. You have to do something but need the insight into what that looks like and not make it as drastic as you might be led to believe.”
Once you have a clear view of your operational challenges, you can get to work on solving them. Technology will play a major part — but before approaching a third-party vendor, it’s critical to get your house in order. Otherwise, you run the risk of implementing technology for the sake of it, rather than what delivers the most valuable outcome.
What will be the impact of R&D tax relief?
Many entrepreneurs would agree that there is one mantra to live by keep things simple. But as Giles Andrews, co-founder of Zopa Bank stated: “It has become so complicated for any business owner to understand. On the face of it, it feels better than yesterday but not as good as it was 10 years ago.”
What all the panel agreed on was that the government had introduced complexity — at the detriment of actually helping businesses navigate the challenges they face and the opportunity to invest back in their business and the wider economy.
As Andrews concluded: “these initiatives haven’t helped attitudes to want to take the incentive — there is a deep-rooted suspicion that there is a desire that they (the government) doesn’t actually want to pay any of the relief back. Whether that’s because of bureaucracy or intent remains to be seen.”
Anyangwe agreed: “Sometimes you have to balance what is good for your business vs what the government is pushing — they might not be mutually inclusive.”
CEOs and CFOs will work closer than ever before
With cost pressures at their height, CEOs will lean on CFOs more than ever as true business partners. Finance teams have a critical role to play in strategic decision-making by providing data insights that help leaders evaluate the organisation’s finances and take action.
To do this, they need a centralised source of financial information with real-time visibility of spending. Armed with this intelligence, they can analyse spending patterns, identify savings, and prioritise investment for activities that support sustainable growth.
You can read more about how Soldo is helping businesses make the most of the 2023 Autumn Statement in our e-book “6 strategies to fuel growth in 2024” — available here