Two of the UK’s leading small business organisations have joined forces to produce a new guide to help small business owners manage cash flow during Brexit.
The Managing Cash Through Brexit guide has been published by the Federation of Small Businesses (FSB) and the Chartered Institute of Credit Management (CICM) to help company owners navigate their way through uncertain economic times.
The guide contains a list of top ten tips for small businesses to help manage cash, which include implementing a basic process for following up on invoices to ensure payment is received on time, and understanding and documenting payment terms.
It also provides advice on how owners can protect businesses against changes to payment terms, made retrospectively, that may be detrimental to a supplier’s business.
Chief executive at the CICM and the guide’s co-author, Philip King, said that Brexit uncertainty had made it even more important that smaller UK business owners understand basic bookkeeping.
“Fixing the roof while the sun is still shining will help to head off potential issues in the future,” said King. “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.”
Commenting the release of the guide, FSB chairman Mike Cherry reiterated the impact of late payment culture on Britain’s small firms. Late payments remain widespread in 2017, with the value of unpaid invoices to small firms averaging at £6,142.
According to FSB research, 50,000 more UK businesses could be kept open if all payments were made on time, giving the UK economy a £2.5bn boost.
Cherry added: “We are working closely with the government to ensure its proposed corporate governance reforms ensure 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.”
In a major Brexit speech on 17 January, the prime minister Theresa May added some clarity for confused business owners over the UK’s stance towards negotiating its way out of the EU.
She confirmed that Britain would not seek access to the EU single market in its current guise, and would instead seek to create a bespoke trading agreement with the European bloc.
Small business payment disputes are costing the UK billions
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