At Forshaw Associates we foresee two possible problems for SME business in the UK in the second half of 2008.
- Larger clients are going to extend their payment times.
- Will the banking industry continue to support the SME market?
Based on this we have drafted a 3 point plan to combat the effects of the credit crunch for the remainder of this year.
1. Cash Flow Management
- Re-consider your invoice terms on goods sold.
- Tighten your credit control – put procedures in place & stick to them.
- Revise all your expenditure i.e. Utilities, Bank Charges, can a discount be obtained for say paperless billing? Do this for both business & home.
- Ensure your management accounts are up to date and precise. This will give you a clear image of your business and where it stands financially.
2. Recover those old bad debts
- Review your debtor list especially your 90 days +
- Chase your debtors who are outside of your credit terms.
- Enforce collections or agree to payment terms.
3. Plan ahead for growth
- Consider your future order book and the finance required to make this happen
- Re-consider your invoice terms and perhaps reduce the time to pay.
- Review your existing clients ability to pay – don’t just rely on their credit report. Consider the past history and look at how and when they pay you.
- Plan for any future capital investment or renewal of machinery/equipment.
- Looking at staffing and recruitment – perhaps offer overtime to existing staff or consider temporary or contract workers.
If you require any assistance or have any questions please contact us today.
Click here for Forshaw Associates
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