Published by the Current Accounts Magazine by the Georgia Society of CPAs (September/October 2023 Issue) and the the Andersen Alumni Association's October 2023 Vol.16 No.4 Newsletter

  • Prepare for a mild U.S. recession near the end of 2023 or early in 2024. If your business is located in the South or other high-growth regions, the recessionary impact could be minimal.
  • Keep a close eye on inventory levels. Be especially vigilant if you serve individual consumers and your product is susceptible to discretionary spending. Many businesses that ramped up inventory levels in the wake of supply chain shortages may be caught with excessive product, a potential problem if a recession materializes.

  • If you are a business owner anticipating the need for capital early next year, act now. Expect further credit tightening and potentially more rate hikes to come.

  • Take time to assess depository relationships, including the quantity of deposits at a given financial institution and the need for multiple banking relationships.

  • Review cash management practices with a focus on proactive strategies. For example, investing the company’s deposits in overnight treasury sweeps (where cash is transferred daily into a higher-interest investment) might not have mattered when interest rates were low. Today, however, it can be meaningful.

  • Pay attention to accounts receivable and vendor payables to avoid becoming stretched if the economy does begin to tighten. Prioritize the management of optimal working capital.

  • If you own a well-performing business, the timing for a professional sale process remains excellent, especially if your business is less likely to be affected by tougher economic conditions or a recession.

  • Pursuing acquisitions you have considered but not yet executed may turn out to be a timely strategy. Though this contrarian approach is not for everyone, it could pay surprising dividends.