By Maximilian Clarke
Businesses are increasingly concerned about cashflow, with two in three respondents to a survey reportedly coming danger of closure, credit management company, Daniels Silverman has said.
Daniels Silverman canvassed 180 small businesses across a range of sectors and found that 65% felt poor cashflow was threatening their chances of survival. More than 70% had seen cashflow deteriorate in 2011 and over 80% were concerned that cashflow will worsen in 2012.
A third had been forced to scale down their businesses or make redundancies due to poor cashflow. Over 90% were not aware of the EU Late Payment Directive which comes in to force in the UK in 2012 and only 8% of those that were aware felt that it would make a difference.
“Many SMEs (small to mid-sized enterprises) are struggling with difficult trading conditions and increased overheads,” said Carole Hughes, managing director, Daniels Silverman. “The outlook is increasingly gloomy with most SMEs predicting worse to come. SMEs have little confidence in existing payment legislation and are not even aware of the forthcoming EU Late Payment Directive.”
“As financial conditions worsen maintaining a positive cashflow will become more challenging and we are encouraging SMEs to prioritise payment. Businesses must undertake more regular credit checks, put in place processes that highlight when a creditor is in financial trouble and, most importantly, act quickly when payments are overdue.”
Join us on