Businesses are in no rush to make investments amid the ongoing uncertainty of Brexit, according to the Institute of Chartered Accountants in England and Wales (ICAEW).
More than one in four businesses are delaying investment decisions as the government continues negotiations with the EU. As a result of their collective cautiousness, 61% of those firms surveyed reported a cash surplus in 2016/17 with 64% anticipating similar results from 2017/18.
37% have no plans to invest their cash reserves in the next 12 months, with 49% of those wanting to remain flexible, 32% braced for further uncertainty and 30% citing no investment opportunities.
However, the ICAEW has called on businesses to be more proactive and loosen the purse strings in an attempt to promote growth.
Michael Izza, chief executive of the ICAEW, said:
“Businesses should be investing now for the future and not for austerity.
“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 – and this involves spending some of the mountain of cash they are sitting on.”
If you’re looking for ways to invest a cash surplus, one option could be to reinvest in your business. In an increasingly digital environment, updating your IT infrastructure would ensure your systems remain up to date.
However, more traditional options such as developing staff and investing in the latest technology could pay off in the long term.
For more information on business planning contact Lewis on 01443 841184.