Henderson Loggie welcomes delay on SME P&L disclosure

Henderson Loggie has heralded the government’s decision to extend mandatory public filing of detailed profit and loss accounts for small companies further than 2027 as a win for Scotland’s SME sector.

The firm said the postponement shields thousands of businesses from having commercially sensitive margins disclosed at a time when many are contending with constrained trading conditions, escalating costs and heightened competitive pressures, with SMEs making up 98% of all Scottish businesses.

Henderson Loggie added that the delay is particularly valuable for internationally renowned niche industries in the country, such as whisky, food and drink, renewables, engineering and fast growth tech, where global competitiveness relies on pricing strategies and cost structures. 

It said premature disclosure could have exposed important commercial intelligence to rivals, customers and supply chain partners.

Henderson Loggie has encouraged SMEs to use the breathing room to enhance their financial preparedness and ensure they are fully equipped to comply with the revised reporting regime once it comes into effect.

The firm recommended determining whether current accounting software can support the new filing requirements and budgeting for possible cost hikes, adding that companies will need to swap over to digital filing as paper submissions to Companies House will be phased out.

It said that directors should reassess their reporting framework for the current financial year to meet new demands for accurate comparative profit and loss figures.

The firm has also urged commercial teams to consider how increased transparency may affect negotiations, proposing that greater margin visibility could decrease suppliers’ bargaining power and prompt customers to push for discounts. 

It said that SMEs need to know precisely what information will fall in the public domain and how it could influence pricing strategy.

However, Henderson Loggie added that despite their delay, impending changes yield potential positives as more uniform and visible reporting can fuel trust with lenders and investors, facilitate access to finance, and help curb fraud. It said adequate advanced preparation will enable SMEs to realise these benefits while mitigating associated risks.

Diana Penny, audit partner at Henderson Loggie, said: “This delay is a welcome development for Scotland’s SME community. It gives businesses vital time to prepare for a major shift in financial reporting without the immediate pressure of exposing sensitive commercial information.

“We encourage SMEs to use this period to get their systems, processes and reporting frameworks in order. Those who act now will be in a far stronger position when the new requirements eventually go live and will be better equipped to protect their competitive edge.”