Managing your cash flow actively is the smart way to run and grow a sustainable and resilient company. In 2024, cash and financial debt management is more important than ever for SME business owners. With B2B payment terms extending to an average of 48 days and average delays of an additional 17 days*, effective cash flow management is the key to unlocking your business’ full potential and ensuring long-term success.

There is almost always a lag between receiving payment for the goods and services you have sold and paying for the inventory, services, and wages needed to produce them. This delay impacts your cash flow. To enhance short-term liquidity and efficiency of your business, it is essential to effectively manage your cash flow.

Effective cash flow management has 5 main levers:

1. Forecast future cash flow to anticipate potential gaps between cash inflows and outflows. Cash flow forecasting is an essential tool to project your company’s financial health allowing you to budget, invest cash surpluses and understand if or when you may need additional financing.
2. Optimise inventory levels to avoid tying up cash in excess inventory. Purchasing inventory represents a cash outlay and consequently, purchasing too much inventory which won’t be turned into cash flow in a timely manner can put an unnecessary strain on your finances.
3. Negotiate favourable payment terms with suppliers to provide additional time to generate revenue before settling bills. Accounts receivable may constitute a large portion of your assets and how you manage them can have a big impact on your business’ financial health.
4. Accelerate accounts receivable by promptly invoicing customers and following up on overdue payments. A large portion of overdue payments relate to buyers simply forgetting to pay. As such, sending reminders in advance of the due date is another important tool to ensure payment is received on a timely basis.
5. Leverage short-term financing options from banks or from alternative financing providers to secure a safety net for cash flow fluctuations. This can help ensure that you can continue to run your business with peace of mind and overcome any hurdles or challenges you may face relating to long payment terms or delayed payments.

Traditional short-term financing options, including overdrafts, short-term loans and invoice factoring, often exacerbate the dilemma due to high costs, cumbersome and lengthy processes, and general inaccessibility to SMEs. Here’s an outline of the pros and cons of these traditional solutions:

Recognising these gaps, our trusted partner, TRIVER, introduces a revolutionary approach to SME cash flow financing. A strong cash flow not only ensures that operations continue smoothly but also provides the flexibility needed to navigate through uncertainties. With a TRIVER facility you can smooth your working capital simply by turning your unpaid client invoices into cash, when needed without taking on any additional debt. TRIVER differentiates in several dimensions:

• Fast: open a facility and advance invoices in minutes online
• Simple: no personal guarantee, no securities, no paperwork
• Discreet: invisible to your clients, not trust account
• Flexible: facility up to 20% of your annual turnover
• Fair: one simple daily fee per invoice you advance for the days you use

The partnership between Soldo and TRIVER represents the future of SME finances, empowering SMEs with the tools you need to run your business with peace of mind. Discover how TRIVER’s tailored solution can transform your financial management and secure the future of your business today*.

*Opening a TRIVER facility is subject to approval based on evaluation of the required information collected at application stage.

Did the Spring Budget deliver on the government’s promise to accelerate economic growth? A staggering 92% of attendees at Soldo’s Spring Budget debrief felt the new policies fell short of expectations for stimulating growth.

What is Soldo’s Budget Series?

Staying informed about government budgets and fiscal policy announcements is essential for UK businesses. Soldo’s Budget Series bridges the gap by convening business and economic leaders to share insights and deliver a comprehensive analysis of the latest fiscal policies and trends.

Soldo’s Spring Budget 2024 debrief

In our recent Spring Budget debrief we brought together an expert panel to discuss Chancellor Jeremy Hunt’s 2024 Spring Budget.

• David Owen, Chief Economist, Saltmarsh Economics
• Emma Heal, Managing Director, Lucky Saint
• Liz Earle, CEO, Liz Earle Wellbeing
• Carlo Gualandri, Founder and CEO, Soldo

Here’s what our experts had to say about the Spring Budget:

Unlocking growth: tax breaks and technology

David Owen pointed out that while the UK economy is performing better than expected, productivity remains a challenge. The UK’s strong service sector positions us well to leverage the opportunities of AI, but the government’s narrative must be reframed around improving productivity if the UK is to compete seriously on the global stage.

By embracing tax breaks for new equipment and capitalising on the burgeoning AI landscape, UK businesses are well-positioned to thrive in the years to come.

• Invest in the right equipment and tools: Fully expensed leased assets are now a reality. This means businesses can claim the full cost of new equipment upfront, freeing up cash. This is an opportunity to invest in cutting-edge technologies that can propel businesses forward, particularly in the eco-friendly and AI sectors.
• AI: The government’s significant investment of £100 million in the Alan Turing Institute underscores their commitment to fostering a thriving AI ecosystem in the UK. Businesses must take advantage of the immense potential of AI to streamline operations, enhance decision-making, and gain a competitive edge.

Good news for small businesses

The VAT registration threshold has been increased to £90,000, offering a potential lifeline to over 28,000 UK businesses. This means less paperwork and red tape, and businesses won’t need to register for VAT or charge it on their sales if they remain below the new limit. This can translate into freed-up time, money, and resources that can be reinvested into growth, hiring, or simply keeping doors open.

Productivity: it’s a team sport

Carlo Gualandri emphasised the need to break free from outdated processes and embrace best practices. Equipping teams with the right tools and fostering a culture of full investment in the company’s success is also crucial.

Emma Heal echoed this sentiment, highlighting Lucky Saint’s growth mindset where everyone is informed and actively contributes to the business plan.

Social impact

Liz Earle reminded us to consider the bigger picture and to think beyond profits, to the social impact of our tech choices, such as copyright infringement and job losses as well as new opportunities.

The CEO and CFO: a powerhouse partnership

In an era of tight margins, a strong CEO-CFO relationship is vital. The CEO sets the strategic course, while the CFO illuminates the path with data-driven financial insights. Working together to navigate the company towards financial sustainability and strategic growth.

Six growth strategies for 2024

To help you inform your growth agenda in 2024, we have distilled the panel’s insights into six key actions:

• Challenge the status quo to improve productivity
• Choose who will be the ‘bridge’ to bring AI into your business
• Never stop learning and upskilling
• Embed sustainability into your corporate culture
• Ensure you have complete clarity over your finances
• Embrace the power of the collective to drive change

Download the full summary: Spring Budget Debrief: 6 Growth Strategies for 2024

While many critical workflows for accountants in business can be automated, you still need to be aware of the critical dates in 2024 related to filing deadlines and tax changes.

Planning is critical. Missing deadlines and paying incorrect values can result in the business receiving fines and needing to undertake time-consuming admin. This can impact the resourcing of your teams and have a knock-on effect on producing accurate forward-looking forecasts.

Due to the incoming recession, making agile decisions based on accurate data is more critical than ever. Don’t accrue deadlines and fines; schedule tasks for teams in advance by following our critical dates for the 2024/2025 tax year ahead.

1. Tax Year Start: The tax year for 2024/2025 will begin on April 6, 2024, as it traditionally does each year.
2. Self-Assessment Deadlines:
3. • Paper tax returns for the 2023/24 tax year are due by October 31, 2024.
   • Online tax returns and any tax owed for the 2023/24 tax year must be submitted and paid by January 31, 2025.
3. VAT and PAYE: VAT returns and payments are generally due 1 calendar month and 7 days after the end of an accounting period, which can vary based on the business’s specific VAT accounting period. Monthly PAYE and Class 1 National Insurance contributions (NICs) need to reach HMRC by the 22nd of each month if paid electronically, or by the 19th if paid by cheque. Quarterly PAYE payments are also an option for those who pay less than £1,500 a month, due by the 22nd after the end of the relevant quarter. Monthly remittances for PAYE must be submitted by the 19th if sent by post or by the 22nd if submitted online. P60 forms for the 2023/24 tax year must be issued to employees by May 31.
4. Corporation Tax for Limited Companies: If you’re running a limited company, you need to inform HMRC within three months of starting your business. Payment deadlines for taxable profits of £1.5 million or less are nine months and one day after the end of your corporation tax accounting period. For taxable profits of more than £1.5 million, you’ll likely need to pay your corporation tax in four instalments. The deadline for filing your company tax return is 12 months after the end of your company’s accounting period.
5. Statutory Payments: From April 2024, there will be new rates for statutory maternity, paternity, adoption, shared parental, and sick pay. The specific rates have been updated for the 2024/2025 tax year.
6. National Insurance (NI) and Tax Bands: There have been changes to NI rates, including a two-percentage-point cut from January 6, 2024. Additionally, a new Scottish tax band has been introduced, and there are updates to thresholds and rates for existing bands.
7. Student Loan Thresholds: The thresholds for repaying student loans have increased for certain plans, with no changes announced for others yet.
8. Flexible Working Legislation: Starting in the new tax year, employees will be entitled to request flexible working arrangements from the first day of their employment.

These updates reflect changes in statutory pay rates, tax regulations, NI rates, and other financial obligations that businesses and individuals in the UK need to be aware of for the 2024/2025 tax year. For the most accurate and detailed information, it’s recommended to consult official government resources or financial advice tailored to specific circumstances.

2024 Spring Budget and Autumn Statements

The Spring Budget for 2024 is confirmed for March 6, 2024, as announced by the Chancellor. This date is significant for financial planning and forecasting, marking a key moment for the announcement of government fiscal policies and economic measures for the upcoming year. For more detailed information on the Spring Budget 2024, bookmark the official gov.uk webpage, where announcements and updates are published.

As for the Autumn Statement, while the specific date for 2024 hasn’t been directly provided in the sources accessed, it usually takes place in late November or early December. It’s another crucial event where the government outlines additional economic forecasts and reviews the financial measures introduced in the Spring Budget. You should keep an eye on official announcements from HM Treasury. You can download the summary of insights and action points from our Autumn Budget event last year.

These fiscal announcements are essential for businesses, financial planners, and the public to understand the government’s economic priorities and how they may impact taxation, spending, and investment within the UK.

Filing deadlines specific to you

Alongside dates that affect all companies, you’ll also have your own filing and payment deadlines for VAT, annual accounts, and corporation tax, so mark these in your teams’ calendars now.

Humans, despite all our fancy tech and modern comforts, are primates. We’re complex and blessed with big brains – but we remain animals nonetheless. And according to Robin Dunbar, a leading evolutionary psychologist from the University of Oxford, it’s essential to consider our primal nature when running or building teams.

His research challenges the familiar idea of ‘It’s not personal, it’s just business’. The reality is that’s work is both: It’s personal and it’s business. “The workplace is a social world,” he explains on Soldo’s podcast The CFO Playbook. “And it engages with the wider world by selling products and services.”

In this blog, we summarise five insights from our podcast interview with Professor Robin Dunbar. If you’re interested in hearing more, you can listen to the show here. 

Robin Dunbar’s five insights for business:

The view of the accountants

“The last fifty years have been dominated by the view of the accountants. Anything we can count up, profit and loss or dividends for shareholders, that’s what matters.

“What we’re suggesting, however, is that it may not be the most important thing. The numbers are a beneficial by-product if you get the dynamics of the organisation itself right.

“The organisation is a village.”

Non-negotiable constraints

“The underlying social constraints that apply to all monkeys and apes, also apply to us. Just on a bigger scale since we have bigger brains. This manifests in two big ways.

“One is the constraints on the size of the social network we can maintain. Essentially, the number of friends you can have. This is limited across primates by the size of their brains – and in humans, equally so.

“The limit in humans is about 150 people, give or take. So if you get your numbers right in an organisation, it will work better.

“The second part is about how we bond and build trust. The endorphin system of the brain seems to be the main neuro-hormone that underpins long-term bonding. The way we build trust and friendship outside of work applies just as much in work.

“This tends to be activities like eating together, storytelling, singing and dancing. We have a social toolkit, in other words. These are precisely the sorts of measures that are ignored in the boardroom because it’s hard to quantify. But it’s very, very real.

“If you take the time to invest in these sorts of social measures – for instance, making arrangements for communal eating – the productivity will go up for free.”

Optimal efficiency

“Your social world looks like ripples on a pond when you throw a stone in. Imagine you’re the stone, and the ripples running out from you increase in width – meaning more people are included – but the wave height gets lower and lower.

“This implies that the quality of the relationships declines as you go further out. Research tells us that these ‘waves’ come in fairly defined numbers. As I’ve said, the boundary for people that you can have meaningful relationships with is 150.

“What this means for organisations, is that you have to think carefully about numbers on a task-by-task basis. When putting together a group, ask yourself what’s the function and how well the people have to gel for the process to flow efficiently.

“A team that’s designing a specific bit of kit, needs to work together very efficiently without having to constantly stop and explain details. You want a small group and a group that’s on the same page.

“If you want a group to throw ideas around – blue sky thinking – what you need is a diversity of background and experiences. If everyone is on the same page, they’ll come up with the same ideas.”

The homophily effect

“Our abilities to manage relationships are limited. We have a strong preference for people who are similar to us. It’s what’s known as the homophily effect and it’s the single best predictor for whether you’ll be friends with someone or not.

“The homophily effect is an opportunity for organisations to set up a culture, as it were. I’m not talking about putting a mission statement in your foyer – it’s deeper than that. People should have a sense of the organisation’s history and the purpose it serves in the world and the community.

“These become the myth of the organisation. And they become like the totem pole on the village green that everyone can look to and say ‘yeah, we believe in this and this is why we belong together.”

The yearning for community

“Modern life is a lot more insular, and this is driven by the capacity to entertain and socialise at home more easily. You can buy exotic foods and cheap alcohol at the supermarket. Streaming services offer a library of films and TV.

“We don’t need to go out in our community when we’re bored. That’s broken the sense of community. So the question is how do reconstitute the sense of community in modern life? The obvious answer is work. We spend so much of our time there.

“Companies have been spending huge quantities of money on sticking plaster solutions for their peoples’ mental health challenges. But the real solution is obvious and costs a tenth of what you’re investing in consultancies and medical professionals.

“What you need to do, essentially, is find someone good at organising parties. Organising the kinds of social events that people enjoy doing. Those solutions exist, and they’re often very cheap.

“Two activities spring to mind: one is singing. An hour of communal singing turns strangers into friends. And eating together. Having a good quality cafeteria or dining area, where food is subsidised or cheap, will attract people.

“You’ve got to actively work on facilitating social engagement.”

You can listen to the full interview with Professor Robin Dunbar here. Enjoy the show? Be sure to subscribe so you never miss an episode!

The continued unpredictable economic outlook means that benchmarking should be a priority in 2023 and beyond.

Investors now look how you are faring across various measures. This includes your historical performance, comparable companies, and the broader economy.

Additionally, there is now more competition than ever in the UK market. Almost a million a million new companies formed in 2022. That’s an increase of 4.3% from 2021. This activity is being driven by digital tools, making it easier than ever to start and grow a business.

Benchmarking will help improve your performance, gain you a strategic advantage in the market and ultimately make you more sustainable to survive and thrive over the longer term.

While it can be time-consuming to set up benchmarking processes and analyse data, doing so has the potential to save nearly 7% of revenue.

This article will examine:

• What is benchmarking?
• Why is benchmarking important?
• Types of benchmarking

What is benchmarking?

Benchmarking is a multifaceted data-driven way to measure the success of your business. The underlying approach requires you to compare your recent output against something else.

It should cover a range of factors, including financial performance and non-financial measures, such as customer satisfaction and quality measures.

Reviewing your performance in the context of benchmarking will give you a better understanding of your strengths and areas for improvement.

Why is benchmarking important?

Success can be subjective. But using a data-driven benchmarking approach ensures your company collectively works towards a common set of quantifiable goals. This ensures everyone is working towards the same targets.

Employees can be motivated to hit benchmark targets by a company-wide bonus being paid out if they are exceeded. For example, this may include benchmarking annual revenue growth by 20% if you are in a fast-growing sector.

Benchmarking can also identify gaps in your performance that require improvement if you are falling below the standard. If you are a SAAS-based business, you’ll likely want to benchmark customer satisfaction levels. Deteriorating or poor performance can have a knock-on effect on acquiring new customers and missing out on future revenues from existing ones.

Types of benchmarking

Competitor benchmarking

Comparing your results and KPIs against your competitors will allow you to assess your performance against the wider industry.

You can define your competitors in several ways, including by sector and company size. If you are a local business that predominantly generates sales in person, you may also want to consider geographical reach.

Once you can compare data points against your competitors, you can assess which elements of your business to adjust to remain competitive and capture as large a share of the market as possible.

Competitor benchmarking can be challenging as it can be hard to find reliable data. While all companies must file publicly available accounts at Companies House, only large companies have to file full versions.

Data from competitors’ social media activity can be helpful for non-financial metrics but will likely require specialist tools.

Internal benchmarking

Internal benchmarking requires you to assess your previous results against your current performance.

This lets you see if the business is improving or whether specific areas, such as sales or profitability, require improvement.

The widespread availability of real-time financial data, powered by cloud accounting software and spend management tools like Soldo, means that internal financial data is more accessible than ever. So you can benchmark and optimise performance as frequently as you like.

Strategic benchmarking

Strategic benchmarking is when you compare yourself against businesses outside your sector to companies delivering a world-class performance.

Adapting your processes to be like these superstars will elevate you to a standard beyond what is expected in your sector.

Using strategic benchmarking, the cereal manufacturer Kelloggs have generated cost savings representing 6%-7% of their annual run rate.

What gets measured gets managed

As Peter Drucker, the father of management thinking, said, “What gets measured gets managed.” This illustrates the importance of using benchmarking to reach and exceed company goals.

However, given data is now so prevalent, it’s equally important to ensure you are benchmarking and measuring the most relevant data points.

In the companion piece to this post, we’ll explore some practical ways to get started in your benchmarking journey.

Salame di cioccolato is a no-bake Italian dessert with just seven simple ingredients. It’s a must-have for any Christmas table. Our very own Barbara Parmigiani, Italian Regional Marketing Manager, shares her family’s classic recipe.

A delicious legacy

Salame di cioccolato is a treasured Italian Christmas treat passed down through generations, blending chocolate, biscuits, butter, and occasionally a splash of brandy or marsala wine. Pure chocolatey goodness!

Ingredients

• 200g good quality dark chocolate
• 100g butter
• 100g sugar
• 2 eggs
• 200g digestive biscuits (or similar)
• 100g chopped hazelnuts
• 50g icing sugar

Method

Melt the chocolate: Break the chocolate into pieces and melt it in a heatproof bowl over simmering water, ensuring it doesn’t burn. Once done, remove your chocolate from the heat and stir in the butter until melted.

Prepare the base: In a separate bowl, whisk the eggs and sugar until the mixture becomes pale and fluffy. Slowly add the melted chocolate and butter mix, stirring continuously.

Crush the biscuits: Crush the biscuits into small pieces. You can do this by placing them in a sealed plastic bag and gently tapping with a rolling pin (a welcome Christmas stress buster)!

Mix and fold: Fold the crushed biscuits and chopped hazelnuts into the chocolate mixture until just combined. Combine all ingredients until well mixed, resembling the look of a salami. You should still see bits of biscuit and chunks of chopped hazelnut.

Shape and chill: Lay out a large sheet of cling film, and carefully transfer the chocolate mixture onto it. Mold it into a sausage shape, wrapping it tightly with the cling film. Roll it several times to secure the shape, twisting the ends. Place it in the refrigerator for at least 4 hours to set.

Final touch: Once set, remove the cling film and gently roll your salame di cioccolato in icing sugar.

Serve and enjoy: Slice your salame di cioccolato into rounds and serve it on a festive platter. It pairs beautifully with a cup of Italian coffee or a sweet dessert wine.

Wishing you a Merry Christmas and Buon Natale from all of us at Soldo!

Andy Dean is the CFO of Eden Futures, a social care provider that supports 675 service users with autism, learning disabilities, and mental health challenges to live independently. He recently sat down with Soldo on our podcast ‘The CFO Playbook’.

We talked to Andy about the cost pressures that come with being publicly funded, the political aspect of being a CFO in Social Care, how to help carers do their best work, and more.

In this blog, we’ve summarised three key takeaways from our discussion with Andy that Social Care finance leaders won’t want to miss out on:

1. Use data-driven storytelling to demonstrate value to local authorities and NHS trusts
2. Keep abreast of politics and policy changes
3. Use technology to help staff deliver the best care

1. Use data-driven storytelling to demonstrate value to local authorities and NHS trusts

Eden Futures is 100% publicly funded by a combination of local authorities and the NHS. This means that they feel the pinch when there are changes to government policy.

“The years of austerity definitely increased the pressure on costs and pricing,” Andy explains. There’s pressure being applied on NHS trusts and local authorities to strictly monitor costs and secure “bang for their buck”.

For Andy, this pressure can be managed through effective storytelling. A local authority might initially baulk at a figure on a spreadsheet, but providing the context behind these numbers makes a big difference.

“It’s vital that we can quantify and demonstrate how we help local authorities and the NHS cut costs,” he says. “We always explain that our success story is that a service user needs less support from us.” For example, someone who once needed 24-hour care now only needs support for 4 hours a day.

Using data to demonstrate this reduction in the hours of support required is what keeps cash-strapped local authorities and NHS Trusts coming back to Eden Futures. In addition to improving their quality of life, service users being able to live independently also lowers costs.

2. Keep abreast of politics and policy changes

Social Care, as a publicly funded good, is impacted by politics and policy changes. This means that keeping abreast of what’s going in Westminster is part of Andy’s remit.

Eden Futures, he explains, wants to hit the ground running in the event of a change of government. It’s easy, given Social Care’s many intricate challenges, to focus on what’s in front of you. But Andy cautions that finance leaders should already be thinking about the likely outcome of next year’s General Election.

“At the moment we are looking at what the Labour Party’s policies are in this area since we’re realistically looking at a change in government next year. It’s vital that we’re aware of what’s happening and that likely events are factored into our plans and our risk models.”

What are the main parties saying about Social Care, and what impact can it have on you and your service users? “CFOs in Social Care should cultivate a keen interest in society and politics,” Andy says. Not as a hobby per se, but as an essential component of the job.

3. Use technology to help staff deliver the best care

When Andy made the jump from KPMG to the Social Care sector, it was a decision guided by ambition. “I wanted to make CFO,” he says candidly. But a decade later, he found the work of a Social Care CFO to be far more mission driven.

“Care is such a powerful topic. Everyone you speak to can relate to it and relate to having someone in Social Care. That’s what I love about it, my work as an accountant touches so many peoples’ lives.”

Andy isn’t only driven by making a difference for service-users, he’s passionate about supporting care workers too.

“From a finance team perspective, our aim is always: let’s get paid workers paid correctly and on time. We want to make their lives as easy as we can, so they can focus on the most important part of their jobs: delivering care.”

One way to do this is the intelligent use of technology. Many routine tasks – like expense management – can be automated. The impact is two-fold: less admin for Social Care finance teams and faster reimbursements for care workers. With a solution like Soldo that combines easy expense management with prepaid cards, social care providers can even do away with out-of-pocket spending altogether.

Key lessons: data-driven storytelling, politics, technology

Make sure to listen to our full discussion with Andy Dean, <on Spotify> or wherever you get your podcasts. Until then, remember Andy’s key lessons from 10 years as a Social Care CFO:

• Data-driven storytelling: Local authorities and the NHS are under pressure to cut costs, which means social care providers are too. Use data to tell your story and demonstrate value.
• Politics: As a publicly funded good, social care providers are impacted by government and policy changes. Take a keen interest in politics, so you can plan ahead and mitigate risks.
• Technology: People are the heart of the Social Care sector. Leverage technology to make care staff’s working lives easier, so they can focus on delivering the best care for service-users.CTA: Caring is a tough job. Are you making it easy for staff to deliver the best care possible? One simple way to support your team is with an expense management tool like Soldo.

  We work with over 100 Social Care providers like you. Find out how we can help.

  Find out more >

In our first piece in this mini-series, we laid out why benchmarking is critical to your success in today’s uncertain economic environment and outlined its main components.

Exceeding historical company performance and surpassing your competitors will make your business more sustainable and maximise its chances of receiving follow-on investment at favourable terms.

Now that you are equipped with the basics of benchmarking let’s look at how to start your benchmarking journey with some practical tips to finetune your company’s performance.

In this blog, we will look at:

• What to measure
• How to define your competitors
• Where to find competitor info
• How often you should collect data
• Tools to analyse data

Decide what to measure

The digital economy means we live in an age of drowning in data. There are a plethora of data points available to measure, but it’s critical to ensure you are analysing the most appropriate ones.

Data points picked should take into account your sector, business model and stage of growth, as well as financial and non-financial information.

For example, if you are a SAAS business, this should include revenues and output from your CRM. Ideally, use a tool that can blend these to further insights.

You’ll also want to consider qualitative data points based on what customers think of your and your competitor’s products and services. This will require judgment as qualitative data comparison can be hard. That said, the development of AI tools such as Chat GPT means measuring the sentiment of qualitative data may be possible.

Define your competitors

To benchmark your data against competitors, you should identify similar companies by a range of measures, including industry, company size, geographical location, and a combination of all three if the market you serve is large and mature.

To make comparisons to competitors meaningful, you should identify a relatively small number of around three to five companies. Creating a more extensive list will be less useful. And may be hard to manage due to the time and effort to access related data points.

Aim to include the market leader, a plucky upstart and an established, recognisable brand that may have fallen behind due to not moving with the times by failing to innovate.

Where to find competitor info

Competitor information can be found from various sources. Some of which will be free. While others may require expensive subscription licences.

The Companies House website is free to use and includes annual account filings for every UK company. However, filings for smaller companies will be less meaningful as they are only required to submit filleted accounts that consist of condensed balance sheets.

Alternatively, commercial databases such as DueDil and Dun & Bradstreet can allow you to search companies across various fields. Such as by turnover, location and industry. Industry searches are conducted based on Standard Industrial Classification (SIC) codes and categories assigned by providers.

If you are a fast-growing company, Beahurst is an invaluable data resource that tracks 45,000 high-growth UK companies across various areas, including detailed financials and the number of employees. You can also segment results by growth, such as percentage change in EBITDA.

How often should you collect data?

Benchmarking should take place on a monthly and annual basis.

While you will likely only be able to access competitor information annually, you can benchmark your latest monthly financial figures against your historical ones to see how you are performing on a close to real-time basis. However, remember that seasonality can skew sales data.

To access the latest competitor financial data on Companies House. Set up alerts to immediately notify you when annual accounts are filed.

Tools to analyse data

Several tools are available to help you analyse and compare data for benchmarking.

These include Futrli, an app that pulls in your financial data from cloud accounting software. This lets you set up views to benchmark against internal performance and competitors.

Be The Business, a not-for-profit organisation that helps businesses improve productivity has a free tool to benchmark your company. Users are required to fill in a short questionnaire that identifies firms most similar for comparison purposes.

For social media benchmarking, try Brandwatch, a tool that shows you how you are faring against competitors for campaign engagement. The platform can also help to optimise performance by identifying content your audience will most likely engage with.

Implement changes

Once you’ve analysed the output of benchmarking reports, communicate changes internally to optimise business performance.

As accountants and finance team members increasingly grasp data analytics, they can inform of changes across the whole business rather than just their departments.

Going forward, you can then assess the effectiveness of changes by continuing to benchmark. If your benchmarking is improving, show it off. Particularly  if you are raising a new round of finance.