By Daniel Hunter
Cash flow remains a significant concern for a large number of UK CFOs, according to new research from leading recruitment specialist Robert Half UK.
More than four in 10 (41%) CFOs in a UK-wide survey said cash flow was one of the biggest internal concerns they currently face in their role. However, this figure rises to 46% for small and private companies.
On a regional basis, firms in the North and Scotland are the most concerned about cash flow, with nearly half (48%) saying they were concerned compared to those in London and the South East, where firms were the least concerned (37%). The North and Scotland also tops the regions for suffering from slow paying customers (71%) as well as from competitive pricing / low margins (54%).
When asked which three factors contributed to their concerns around cash flow, six in 10 (61%) CFOs cited slow paying customers as the main reason, a figure which has risen from just 26% in 2011. Following closely behind, more than four out of 10 (45%) blame customer / client insolvencies, competitive pricing / low margins (41%), higher business expenditures (40%), lower revenue (38%) and higher taxes (26%).
Interestingly, lower revenue is now less of an issue for companies compared to last year, decreasing to 38% in 2012 from 50% in 2011
“Cash flow clearly remains a priority for finance leaders, particularly small and private companies who rely heavily on liquid capital to keep business running as usual," Phil Sheridan, Managing Director, Robert Half UK said.
"With half of all UK jobs coming from small to medium-sized businesses (SMEs), it is essential for these organisations to be supported to get the economy back on the right track.”
While fewer than one in four (23%) finance leaders are concerned over access to investment financing, CFOs offer their insights on the factors making it difficult for companies to secure credit and finance. At that top of this list is the business sector as nearly four in 10 (36%) say that operating in a perceived risky or depressed industry is the chief barrier to securing financing. This is followed by the perceived exposure to bad debt and risk (33%) and a poor credit rating (28%).
“Access to financing has prompted cash flow concerns for one in four businesses and it is generally issues on a macro-level that are preventing organisations from securing the investment they need," Sheridan concludes.
"Companies need to ensure they have the right talent in place to provide prudent financial management, making their businesses as attractive as possible for lending institutions.”
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