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Cashflow is the Biggest Issue for Small Businesses |
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The most challenging issue for small businesses in the current climate is late payment, according to a survey. Research conducted by Hilton-Baird Financial Solutions on behalf of the Asset Based Finance Association (ABFA) found that cash control and managing cashflow were identified as the biggest challenge, with over half (55%) highlighting this issue.
The study found that small businesses were currently being squeezed by both customers and suppliers. Over one in three (37%) said they had been asked for swifter payment terms by suppliers in the past six months while nearly half are also under pressure to extend credit terms to customers. Almost one in four (24%) firms said they have to wait more than 60 days for payment in some instances.
While good cash control is central to the success of every business - through good times and bad - small firms are at the sharp end when it comes to experiencing the pain that gave rise to the term ‘credit crunch'.
There are a number of practical steps small businesses can take. For example, reviewing their own payment terms to their customers, invoicing in the middle rather than at the end of the month, look to outsource specific tasks such as office admin or bookkeeping and speak to your accountant about how to efficiently finance capital assets.
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