The Chartered Institute of Credit Management (CICM) and the Federation of Small Businesses (FSB) have published the Managing Cash Through Brexit guide to highlight the basic principles of cashflow and credit management to help steer businesses through the current uncertainty.
The guide poses a series of questions to help small businesses assess their current risk and exposure, and provides helpful advice in the form of ‘Ten Top Tips’ to help manage cash. These include understanding and documenting payment terms and having a basic process for following up on invoices and ensuring payment is promptly received.
It also includes advice on how a business can protect itself against any retrospective changes to terms that may be to the supplier’s detriment, as well as the role of the Prompt Payment Code (PPC) and how it can be used to challenge poor practice.
Philip King, the Chief Executive of the CICM and author of the new Managing Cashflow Guide, says that sticking to the basics are even more important in times of change: “Fixing the roof while the sun is still shining will help to head off potential issues in the future,” he explains.
“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 added: “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 £2.5 billion 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.”
Download the guide here