This is one of the key findings from a recent survey carried out by the ICAEW, the professional body representing chartered accountants. According to the research, just under two-thirds of respondents (61%) reported that they have a cash surplus this year. A similar proportion of businesses (64%) anticipated having a cash surplus next year as well. Of the latter, well over a quarter of (28%) reported that their surplus for 2018 would be even higher compared with this year.
The ICAEW said the survey findings reflect the continuing fall in business investment that UK plc has experienced over the past few years. As highlighted by nearly a fifth (19%) of respondents, the single most important factor which would encourage businesses to put their surplus cash to use would be greater clarity on Brexit outcomes. In second place and highlighted by one-in-ten (11%) businesses, would be the addition of extra Government-initiated schemes covering tax incentives and reliefs.
According to the survey, just over a third of respondents (37%) said they are neither considering investing, nor starting to invest, their cash surplus in the next 12 months. Of those businesses which have already made use of cash reserves, or are thinking of using them, the ICAEW reported that more than two-thirds (68%) are investing in IT infrastructures. Other popular uses include training and staff development (58%) and in the application of new technology (54%).
Michael Izza, ICAEW chief executive, suggested that rather than sit on their cash, now is the time for businesses to support more growth. ‘They need to look for opportunities in overseas markets, make efficiency savings and invest in innovation, talent, new products and services to create a longer-term return,’ he commented
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstance
