How Prestige Business Management Can Help Your Business Improve Its Cash Flow Experience
According to Accountancy Age, on any given day, the total sum owed to small businesses in the guise of late payments total nearly £25,000. This means the cumulative average owed to small businesses every single day is greater than the UK’s average mean salary. This ‘late payment’ cash pile creates cash flow problems for hundreds of thousands of businesses across the country.
Prestige Business Management can help your business benefit from a range of cash flow services. Our services can help improve your overall cash flow strategy and functionality. Prestige Business Management can help unburden your company of the responsibility of cash flow management. We can achieve this by providing bespoke cash flow services. We can help improve cash flow reporting, identify risk, budget planning and strategy, fraud monitoring, electronic payment monitoring, and fully itemised reporting services.
Why is Cash Flow Management Such a Big Deal?
If we go back to that Accountancy Age ‘late payment’ cash pile, we find that £141 billion pounds are ‘tied-up’ in late payments. That’s money that isn’t helping a small business, who has delivered a service or product in good faith, to grow. It means that the company isn’t investing in new equipment and services, isn’t investing in its staff or recruiting more staff.
SME’s account for half of the UK’s GDP. They are the workhorse of the British economy – from the personal trainers, the taxi drivers, the plumbers, the kebab shops to the corner shops. These companies are the foundations of Britain’s business community. The companies/individuals who fail to pay create a debt problem that impacts the wider society. By failing to pay on time, they’re not just impacting that company but the economy as a whole.
Cash Flow – The Lifeblood of the Small Business
Cash flow is what makes or breaks a company. Research from the Federation of Small Business has indicated that approximately 50,000 businesses each year fail because of cash flow problems. The FSB argues that the UK has a “poor payments culture” that costs the UK economy £2.5 billion. The FSB argues the Government must put “supply chain respect” at the heart of changes to Corporate Governance regulations. Big Business is having a negative impact on how small businesses operate and this is exploitative.
These cash flow problems have also created knock-on issues within the SME community. The FSB has found that 37% of SMEs have cash flow difficulties, 30% use overdraft facilities whereas 20% blame late payments for reductions in profitability.
What Can SME’s Do To Improve Cash Flow?
One of the easiest ways of improving your cash flow is to make it as simple as possible for your clients and companies to pay you. If you only accept cash, for example, you create a barrier to payment. But by utilising services that allow direct debit payment, card payments, accepting PayPal or standing order payments through your business bank account could open alternative ways for your clients to pay you in a timely manner.
Using digital accountancy software, like QuickBooks, also helps to improve overall late payments as automated accountancy software platforms can help by providing automated support tools – like sending automated invoice reminders at set dates to help gently remind clients and customers that an invoice is now overdue.
Using accountancy services, like Prestige Business Management, can help SMEs protect their cash flow by providing useful forecasting and planning services that can help identify trends and risk that could negatively (or positively) impact your cash flow process.
There are alternative financing platforms – like Moorgate Finance – who can help reshape your finances. Moorgate Finance is a trusted Prestige Business Management partner. If you would like to know more about Moorgate Finance, please get in touch with us today.
Furthermore, if your client base is larger companies – like public limited companies – then you need to lobby them to pay on time and to highlight how disruptive late payments can be for SME organisations.
Technology Can Help Improve Cash Flow Management
Tech services, called FinTech, are eyeing up cash flow as the next avenue ripe for disruption. As SMEs turn to banks to cover gaps in revenue created by late payments, the costs associated with bank lending and the terms therein can be quite problematic and difficult for small and microbusinesses. Therefore, alternative FinTech lending has created an alternative means of funding.
There are now organisations like Just Cash Flow plc, among others, who are specifically focussed on lending to SME organisations during periods of financial constraint. These loans can help provide the right framework for SME growth whilst promoting sound lending principles. Always make sure you get financial advice before embarking upon additional borrowing for your business.
How Can Prestige Business Management Help Your Business Improve Its Cash Flow Function?
Prestige Business Management offers a range of financial support services designed to improve your business’s cash flow experience. We can achieve this by providing valuable support, insight and tailored advice. Why not get in contact with us directly on 0203 773 2927? We specialise in the following areas:
- Financial Reporting tools
- Fully Itemised Reporting of Payables and Receivables
- Risk Identification
- Budget Planning
- Fraud Monitoring
- Electronic Payment Monitoring
Prestige Business Management is an innovative accountancy support service. We offer fully Chartered Accountancy services that are designed for an ever-changing business landscape. Why not get in touch and find out how we could help improve your cash flow issues today?