Federation of Small Businesses and Chartered Institute of Credit Management team up to create new Managing Cashflow Guide
Two leading business organisations have come together to create a new guide to support small businesses in managing cash through Brexit.
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, 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.”
The Managing Cash Through Brexit publication is the latest in a series of Managing Cashflow Guides from the CICM, of which well over half a million copies have already been downloaded. The series has recently been revised and updated and is available online. The CICM, the largest recognised professional body in the world for the credit management community, also administers the Prompt Payment Code on behalf of the Department for Business, Energy & Industrial Strategy.