The latest British Chambers of Commerce (BCC) Monthly Business Survey published today, reveals the extent of the problem businesses face with late payment and confirms their recruitment intentions over the summer months.
The results from 430 companies across the UK show that half of businesses (50.6%) feel payment times are taking longer, emphasising the continued pressure on cash flow. Worryingly for job seekers and new graduates, just 30 per cent of businesses are planning to recruit over the next 3 months.
Other key findings in the survey include:
:: A month on from the Chancellor’s Budget, respondents were asked to award the measures a mark out of 10. Over one-third of respondents awarded the lowest mark of 1, with the average score only slightly better at 2.6.
:: In a sign of increasing business confidence, company turnover expectations for the next 3 months have all improved. 30% of firms now expect turnover to improve by 0-25%, which is up from 22% in January’s monthly survey.
:: 30.9 per cent of firms will attempt to recruit in the next 3 months while 69.1 per cent will not.
:: One in ten businesses are spending over 20 hours every week complying with employment law.
Commenting, David Frost, Director General of the British Chambers of Commerce (BCC) said:
“These results show just how tough cash flow conditions are, with half of businesses hamstrung by increasingly late payments. The knock-on effect is that under a third of employers are planning to recruit over the next three months.
“More needs to be done to improve company cash flow and prevent the steady rise in unemployment. It is clear from this poll that the help on offer in the Budget fell short of many businesses’ expectations. Announcing a moratorium on new employment law and scrapping the planned rise in national insurance would certainly send a signal that the government is serious about supporting jobs.”
Source: British Chamber of Commerce
www.ukba.co.uk
Showing posts with label cashflow forecast. Show all posts
Showing posts with label cashflow forecast. Show all posts
Wednesday, 3 June 2009
Sunday, 31 May 2009
Only 27% of small and medium-sized companies in the UK are credit checking new customers
Unpaid invoices and a lack of cash flow are two of the main problems experienced by small businesses at the moment, with some firms only one large fulfilled but unpaid invoice away from collapse.
"It is never a good idea to take chances with new customers, but it is more important than ever when times are hard to ensure that you are trading with legitimate businesses," said Doug Crawford, group managing director at Cattles.
"SMEs should take every opportunity to minimise the risks they face in the current environment, including introducing a policy to credit check every new customer as standard."
Source: Cattles Invoice Finance.
www.ukba.co.uk
"It is never a good idea to take chances with new customers, but it is more important than ever when times are hard to ensure that you are trading with legitimate businesses," said Doug Crawford, group managing director at Cattles.
"SMEs should take every opportunity to minimise the risks they face in the current environment, including introducing a policy to credit check every new customer as standard."
Source: Cattles Invoice Finance.
www.ukba.co.uk
Wednesday, 27 May 2009
The Department for Business, Enterprise and Regulatory Reform (BERR) has published a leaflet for businesses detailing the importance of paying on time
The advice, which has been created in conjunction with the Institute of Credit Management (ICM), outlines what businesses can expect when they sign up to the Prompt Payment Code.
To read the leaflet go to:
http://www.icm.org.uk/PDFBin/188-075%20BERRpayingontimelft-web.pdf
www.ukba.co.uk
To read the leaflet go to:
http://www.icm.org.uk/PDFBin/188-075%20BERRpayingontimelft-web.pdf
www.ukba.co.uk
Saturday, 14 March 2009
Cash Flow Concerns Grow As Late Payments Bite
The latest research released by Lloyds TSB Commercial Finance has found that 29% of small and medium sized companies (SMEs) reported cash flow problems in the second half of 2008.
70 per cent of these companies cited late payment of invoices by their customers as the number one issue, as a growing number of firms stretch their credit terms and hold onto cash.
Simon Featherstone, managing director of Commercial Finance, said: "The research shows that late payments were already negatively impacting cash flows in the second half of 2008.
"With economic conditions remaining tough, it's vital that advisors and funders work with their clients to examine where the threats lie and look at ways and means of strengthening their cash flow going forward.
"It's no surprise that we're seeing a rise in the number of businesses enquiring about products such as factoring and invoice discounting. These forms of finance enable businesses to release the value held in assets, such as invoices, machinery or stock, to quickly strengthen cash flow.
"The use of debtor insurance policies is also on the increase as businesses look to protect themselves from the worst effects of customer insolvencies."
The figures are taken from Lloyds TSB Commercial's Business in Britain survey which polls over 3,400 UK firms, the majority of which have a turnover under £15million.
The study also found that firms in wholesale and distribution and the construction industries were most likely to suffer from late payments (83 and 80 per cent respectively) whilst companies in the hotel, catering and leisure industries faired comparatively well with just 32 per cent blaming late payment.
Download a free cashflow template by clicking here.
www.ukba.co.uk
70 per cent of these companies cited late payment of invoices by their customers as the number one issue, as a growing number of firms stretch their credit terms and hold onto cash.
Simon Featherstone, managing director of Commercial Finance, said: "The research shows that late payments were already negatively impacting cash flows in the second half of 2008.
"With economic conditions remaining tough, it's vital that advisors and funders work with their clients to examine where the threats lie and look at ways and means of strengthening their cash flow going forward.
"It's no surprise that we're seeing a rise in the number of businesses enquiring about products such as factoring and invoice discounting. These forms of finance enable businesses to release the value held in assets, such as invoices, machinery or stock, to quickly strengthen cash flow.
"The use of debtor insurance policies is also on the increase as businesses look to protect themselves from the worst effects of customer insolvencies."
The figures are taken from Lloyds TSB Commercial's Business in Britain survey which polls over 3,400 UK firms, the majority of which have a turnover under £15million.
The study also found that firms in wholesale and distribution and the construction industries were most likely to suffer from late payments (83 and 80 per cent respectively) whilst companies in the hotel, catering and leisure industries faired comparatively well with just 32 per cent blaming late payment.
Download a free cashflow template by clicking here.
www.ukba.co.uk
Sunday, 15 February 2009
Survive the Downturn - Think Cash
Extract from ICAEW report: 8 Ways To Survive The Downturn
Find out how managing cash flow and access to capital and funding can help you survive the downturn.
Managing cash flow and access to capital and funding are critical to all businesses – more so in difficult times.
It is important to keep updating your cash flow forecasts and examine your debt cycles, stock and overhead levels and working capital.
Be proactive
Be proactive in managing your cash. Put cash flow and financing on the agenda for every management meeting.
Consider what you can do to improve your sales in a declining market:
* Can you reduce your stock levels quickly to boost cash?
* How reliant are you on your major customers and suppliers?
* How robust are your credit control procedures?
* If you are ’cash rich‘ do you need to conserve this cash or could you use surplus cash for the longer term benefit of the business?
Minimise your tax liabilities
It’s more important than ever to minimise your tax liabilities where possible and ensure that you are paying the correct amount of tax. Make sure all capital allowances and expenses have been claimed. Are you taking maximum benefit for all losses?
If you have difficulties making your tax payments, talk to HMRC before they become due; it may be possible to agree repayment deals without suffering any surcharges for late payment.
Talk to your financiers
It is vital that you talk to your current financiers before you get into difficulties. If you delay telling your finance providers about changes in your circumstances, they will lose trust in your future forecasts.
Source ICAEW - full report can be downloaded by clicking here.
Find out how managing cash flow and access to capital and funding can help you survive the downturn.
Managing cash flow and access to capital and funding are critical to all businesses – more so in difficult times.
It is important to keep updating your cash flow forecasts and examine your debt cycles, stock and overhead levels and working capital.
Be proactive
Be proactive in managing your cash. Put cash flow and financing on the agenda for every management meeting.
Consider what you can do to improve your sales in a declining market:
* Can you reduce your stock levels quickly to boost cash?
* How reliant are you on your major customers and suppliers?
* How robust are your credit control procedures?
* If you are ’cash rich‘ do you need to conserve this cash or could you use surplus cash for the longer term benefit of the business?
Minimise your tax liabilities
It’s more important than ever to minimise your tax liabilities where possible and ensure that you are paying the correct amount of tax. Make sure all capital allowances and expenses have been claimed. Are you taking maximum benefit for all losses?
If you have difficulties making your tax payments, talk to HMRC before they become due; it may be possible to agree repayment deals without suffering any surcharges for late payment.
Talk to your financiers
It is vital that you talk to your current financiers before you get into difficulties. If you delay telling your finance providers about changes in your circumstances, they will lose trust in your future forecasts.
Source ICAEW - full report can be downloaded by clicking here.
Sunday, 1 February 2009
Cashflow forecasts
A cashflow forecast is an essential management tool. You need to know what monies are owed to you at any one time and when payment is likely to be received. You then need to know what bills you have to pay and when – and reconcile the two to make sure you have enough cash to meet your outgoings.
“What we often find is that businesses come in asking to extend their overdraft facility because they are not being paid on time or they have suffered a bad debt. Often they leave this until the last minute – when they need the money rather than arranging an adequate facility well in advance. The reason why they are in this situation is usually because they don’t have an adequate cashflow forecast – or any at all. If you cannot prepare one of these yourself, ask your business advisor.”
Mike Ford, Senior Business Manager, North Staffordshire Business Centre.
Calculate the worst case scenario in terms of cashflow – and that is the facility you should be trying to arrange.
Also look at ways of reducing your need to borrow such as:
• Reviewing who you are extending credit to – and how much credit you are extending to each customer
• Reviewing how long you are allowing your customers to pay you – and seeing if this can be shortened
• Negotiating longer payment terms yourself – so you have longer to pay
Financing cashflow: the options
• Overdrafts: Ideal for day-to-day cashflow needs – but you may need to consider other options if you are near your limit, cannot arrange a larger facility, or want to reduce the monthly cost or free up your facility for working capital.
• Loans: These spread the cost of borrowing over a longer period – consider putting the element of your overdraft that is “solid debt” into a loan to free up your working capital.
• Invoice discounting: This will release cashflow more quickly. Invoice Finance can give you up to 90% of the invoice value when it’s issued, and the rest (less fees) when it is paid. It can provide bad debt protection too as the invoice discounter can assess your customers and set credit limits for each of them. If a customer becomes formally insolvent, you will be paid 100% of what is owed provided you trade within these limits.
• Asset financing/leasing: This can release cashflow tied up in depreciating assets such as company cars, computers and machinery and equipment. The finance is secured on the asset itself, freeing up your other security (often your property) to secure and raise other forms of finance. Installation, maintenance, servicing and insurance can all be included, making your life easier.
For free business planning software - click here.
For a free business plan template, click here.
For a free cash flow template, click here.
[Extract from Trading Through The Economic Downturn - published by NatWest - full Guide available by clicking here]
http://www.ukba.co.uk
“What we often find is that businesses come in asking to extend their overdraft facility because they are not being paid on time or they have suffered a bad debt. Often they leave this until the last minute – when they need the money rather than arranging an adequate facility well in advance. The reason why they are in this situation is usually because they don’t have an adequate cashflow forecast – or any at all. If you cannot prepare one of these yourself, ask your business advisor.”
Mike Ford, Senior Business Manager, North Staffordshire Business Centre.
Calculate the worst case scenario in terms of cashflow – and that is the facility you should be trying to arrange.
Also look at ways of reducing your need to borrow such as:
• Reviewing who you are extending credit to – and how much credit you are extending to each customer
• Reviewing how long you are allowing your customers to pay you – and seeing if this can be shortened
• Negotiating longer payment terms yourself – so you have longer to pay
Financing cashflow: the options
• Overdrafts: Ideal for day-to-day cashflow needs – but you may need to consider other options if you are near your limit, cannot arrange a larger facility, or want to reduce the monthly cost or free up your facility for working capital.
• Loans: These spread the cost of borrowing over a longer period – consider putting the element of your overdraft that is “solid debt” into a loan to free up your working capital.
• Invoice discounting: This will release cashflow more quickly. Invoice Finance can give you up to 90% of the invoice value when it’s issued, and the rest (less fees) when it is paid. It can provide bad debt protection too as the invoice discounter can assess your customers and set credit limits for each of them. If a customer becomes formally insolvent, you will be paid 100% of what is owed provided you trade within these limits.
• Asset financing/leasing: This can release cashflow tied up in depreciating assets such as company cars, computers and machinery and equipment. The finance is secured on the asset itself, freeing up your other security (often your property) to secure and raise other forms of finance. Installation, maintenance, servicing and insurance can all be included, making your life easier.
For free business planning software - click here.
For a free business plan template, click here.
For a free cash flow template, click here.
[Extract from Trading Through The Economic Downturn - published by NatWest - full Guide available by clicking here]
http://www.ukba.co.uk
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