In November 2011, the Prime Minister announced a new growth package to help SMEs as they struggle with significant cashflow problems which seem to worsen as the economy gets harsher, the Eurozone crisis deepens and SMEs themselves remain reluctant to get help. While some question the impact this will have on an already suffering and overburdened industry, SMEs need to focus on managing cash better in the challenging months ahead, if not on acquiring funding. Efficient cashflow management goes beyond improving a credit control process or debt management process, it may involve automating some financial management processes or utilising the skills of a financial management expert to improve efficiency and cashflow. A large number of SME clients are delaying and missing HMRC payments, hence incurring significant fines, as well as defaulting on other crucial obligations as consumer demand flat-lines and pressures on cash increase. According to a recent Intuit survey on businesses less than 5 years old, getting it right early is the key to startup success. If you are concerned about managing cash better, you should get help now.
According to the Prime Minister ‘We want to reach and help the 80% of SMEs who don’t seek external advice before applying for finance…’. Apparently, it is not just this group of SMEs that shy away from getting help when they really should. Many SMEs struggle with challenging and risky situations, use incomplete and incorrect financial information, work with flawed policies, defective agreements and contracts, as well as keep products that are not making them any money. At the point when they eventually get help, it is often too late and they then have to face a desperate battle to survive which could worsen in potentially weaker economic conditions.
Many SMEs only begin to look for help when the situation becomes desperate, expensive to resolve and timely to fix. The key to survival in the next few months will be to react quickly and seek immediate help when managers spot problems that they are unable to resolve on their own.
Support usually required by SMEs include the development of policies and processes to manage cash better (including getting your existing facilities to work better for you), mechanisms of financial management support including budgeting, forecasting, improving credit control and debtor days/ payments, predicting cash needs including amounts that need to be set aside for tax payment , or just the automation of processes to give better control of finances.
If you would like to have a brief, no-obligation meeting about how we can together take on the challenges of the months ahead, and help build your business into a more productive and profitable one, kindly email us at email@example.com or call us on 01582 516300 or 0845 129 9900. You may also fill the contact form on this site and we will get in touch with you as soon as possible to arrange a free no-obligation meeting.