In the real economy . . .
It has been suggested to me that clients who are used to their businesses being profitable are failing to adjust to lower profits being made now. Is that your experience?
One accountant said to me that clients were used to spending money from their businesses and 'covering' that with dividends at the year end. The clients had not reduced their expenditure (and were to some extent unable to do so because of kids' school fees or whatever) but were now finding the profits did not support sufficient dividends to 'cover' the 'drawings' they had made during the year.
Is that just one accountant's experience or is that common?
Is it perhaps the case that many businesses either have not yet been hit by the recession - or have been hit but do not have accounts showing them what the effect has been on profit?
If so, when will the impact be felt / recognised?
Discuss! (or not if you prefer!)
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