The Federation of Small Businesses (FSB) and the Chartered Institute of Credit Management (CICM) have joined forces to provide a guide on cash flow and credit management to help businesses navigate the Brexit period
The guide includes a list of questions aimed to help businesses assess their current risk and exposure and also provides advice in the form of ‘top ten tips’.
Here are the top ten tips to consider:
- Stay close to customers
- Document payment terms
- Check standard payment terms
- Ensure access to finance
- Review budgets and cash flow
- Include terms and conditions
- Set up a process for invoices
- Use third parties to assist in collecting payments
- Follow competitors
- Use guidance provided
Philip King, chief executive of CICM, said: ‘Fixing the roof while the sun is still shining will help to head off potential issues in the future.
‘Assessing your customers’ plans post-Brexit, and understanding your role within the supply chain, is critical to future prosperity. This means being thorough and organised, with documented processes and terms, and understanding where help is available should you need it both now and in the future.’
Mike Cherry, FSB national chairman said: ‘Our research shows that the average value of each late payment to small businesses stands at £6,142, mainly due to the failure of larger companies to pay on time. FSB further calculates that if all payments were made on time, 50,000 more businesses could be kept open whilst the UK economy would receive a £2.5bn boost.
‘We are now working closely with the government to ensure its proposed corporate governance reforms ensure that supplier interests are represented at the board level in large firms. We’re also delighted to work with CICM to produce this helpful guide for small businesses, so they understand current measures available to help them ensure they receive payments on time.’
Managing Cashflow Guides: Managing cash through Brexit is available here.
