How can SMEs manage credit control and late payment effectively?

smes Feb 14, 2019

There is no doubt that getting invoices paid on time can make a significant difference to SMEs’ cash flow and the lack of cash due to late payment can make or break a business.

Clearly, there are cash flow advantages for those late payers who string out paying their invoices for as long as possible, while the opposite is true for those waiting on the receiving end, often SMEs.

Towards the end of last year Xero Small Business Insights calculated that the average British small business is owed £24,841 in late payments on any given day.  It is clear that Government initiatives, such as getting businesses to sign up to its Prompt Payment Code, are proving less than effective. A year after the appointment of Paul Uppal, the small business commissioner, it was announced that his service had recovered just £2.1m in unpaid invoices on behalf of small companies. Pitiful!

All this has prompted the Government’s Business, Energy and Industrial Strategy Committee to...

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Is your business barely managing and if so why?

brexit productivity smes Feb 12, 2019

Evidence suggests that many UK businesses are barely managing when compared to foreign-owned businesses of equivalent size operating in the UK.

At the moment it is easy to blame everything on the uncertainty surrounding the outcome of the UK’s negotiations to leave the EU, especially as political positions remain entrenched and seemingly irreconcilable with just 40 or so days to go before the deadline.

As the most recent productivity figures from the ONS (Office for National Statistics) showed, productivity and output per hour fell to their weakest in two years at the end of 2018, prompting FSB (Federation of Small Businesses) Chairman, Mike Cherry, to opine: “”Productivity data demonstrates exactly what a prolonged period of uncertainty does to an economy. Small business confidence has dropped to its lowest point since the financial crash, with four in ten firms expecting their performance to worsen.”

Of course, Brexit has prompted more businesses to divert...

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What’s ahead for the retail sector in 2019? – February sector focus

administration retail Feb 07, 2019

It has been obvious for some time that the High Street is undergoing massive changes as online shopping gains a growing share of the retail pie.

Not a week goes by without another announcement of a “big name” closure or restructure and the New Year has been no different after mediocre Christmas sales with Hardy Amies and HMV falling into administration for a second time, Patisserie Valerie and Odd Bins filing for insolvency and Marks & Spencer announcing further store closures as part of its ongoing restructuring.

The figures make gloomy reading.

Deloitte says it has been instructed by more than 20 struggling high street chains in the past two months to assess whether they are eligible for restructuring their debts and lease obligations, according to the Sunday Times.

Towards the end of January the Guardian carried out a survey of the decimation that has beset High Streets in 88 major town centres in England and Wales and found that they have lost 8% of their shops...

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Sharp rise in personal insolvencies in 2018 – what might it mean for your SME?

insolvency smes Feb 01, 2019

Clearly many individuals are finding it hard to cope with rising prices, low wages and ongoing austerity given the latest personal insolvency figures published by the Insolvency Service this week.

Personal insolvencies in 2018 totalled 115,299, a 16.2% rise on 2017 and the highest level since 2011, according to the Insolvency Service.  The majority of these were IVAs (Individual Voluntary Arrangements) which hit 71,034, a record level and an increase of 19.9% on 2017.

Company insolvencies also continued to rise; at 16,090 in 2018 they were their highest level since 2014. The majority, 63.9%, were CVLs (Creditors Voluntary Liquidations).

The top three business sectors for insolvencies were construction, wholesale and retail trade, accommodation and food services.

What does the rise in personal insolvencies mean for SMEs?

The knock on effect of personal insolvencies is consumers reining back on their spending, as they have clearly been doing for some time and most...

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Are we facing recession in 2019 and is it time to redefine growth?

brexit economy Jan 29, 2019

There is no doubt that uncertainty and pessimism are dominating predictions for both global and national economies at the start of the year.

The question is whether this uncertainty will develop into full-blown recession.

The official definition of a recession in Investopedia is “a significant decline in economic activity that goes on for more than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country’s gross domestic product (GDP).”

The whole definition is based on the definition of GDP and what is continuous economic growth. While implied, there is little about living standards, getting people out of poverty or growth of employment.

By many measures there are worrying signs of a slowdown. However as noted by the IMF (International Monetary Fund) at this month’s Davos meeting of the WEF...

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How do businesses develop managers to become good leaders?

leadership Jan 23, 2019

Ambitious people often aspire to becoming senior managers in their organisations and some achieve their goal, but how much thought is given to whether they will be good leaders?

Training is essential for many professions but in many businesses, it is often the case that people are promoted into management jobs because they were good at something else.

While the individual may have been a top performer in their role, it is rarely asked whether that makes them capable of managing other people performing those roles.

Unfortunately, the skills required to manage people well are often a completely different to the skills needed to get on the job ladder and show promise early in a career.

Good leaders need both people skills and strategic sense. They need to be well-organised, know how to prioritise without micro-managing, know how to recruit and motivate the right people and how to handle difficult conversations and decisions.

A two-day management training course is not enough

Business...

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Climate change is an opportunity for SMEs

Uncategorized Jan 15, 2019

In December 2018 the world’s leading scientists warned that there were only 12 years to get climate change under control with warming kept to a maximum of 1.5C or there would be significantly greater risks of drought, floods, extreme heat and poverty for hundreds of millions of people.

Such warnings often seem to fall on deaf ears, when it comes to economists and businesses, and even some politicians, notably US President Donald Trump, who has denied that climate change is a serious issue.

However, at December’s UN Climate Change summit in Katowice, Poland, the message seems to have struck home with some of the world’s largest investors, including pension funds, insurers and asset managers, who issued a Global Investment Statement warning that without urgent action there could be a financial crisis several times worse than the one in 2008. They demanded urgent cuts in carbon emissions and the phasing out of all coal burning.

All this may seem a long way from the...

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January sector focus: Fintech

Uncategorized Jan 10, 2019

Fintech is used describe new technology that seeks to improve and automate the delivery and use of financial services.

Originally the term was applied simply to technology employed at the back-end systems of established financial institutions.

Over time, however, the Fintech definition has been expanded to include any technological innovation in — and automation of — the financial sector, including advances in financial literacy, advice and education, as well as streamlining of wealth management, lending and borrowing, retail banking, fundraising, money transfers/payments, investment management, asset management and some would now also include crypto currencies such as Bitcoin and their administration.

Fintech is also sometimes described as disruptive technology, in that many Fintech start-ups are designed to provide financial services in non-traditional ways, such as by offering online shoppers to secure immediate, short-term loans for purchases,...

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New Year, new start – a good time for some SME forward planning

sme Jan 08, 2019

The end of last year was a time that most businesses would prefer to forget given the continuing uncertainty after the Government postponed a parliamentary vote on the Brexit withdrawal bill.

Members of both the BCC (British Chamber of Commerce) and FSB (Federation of Small Businesses) were reportedly “horrified” by this development and it is unlikely that many will have been impressed by subsequent reported Government contingency planning for the UK leaving the EU with no deal.

The eventual outcome is so difficult to predict that much business planning is on hold. This is supported by research by the BoE (Bank of England) who canvassed 369 companies about their pre-Brexit planning and found that the majority had made no changes to their business plans for the coming year.

However, this is a new year and hopefully the December shambles may have a positive side if it stimulates more SMEs to realise the need for planning.

The New Year is in any case a time when it is...

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January Key Indicator – exchange rates and their impact on SMEs

economy smes Jan 03, 2019

The exchange rate is the value of a country’s currency against those of others and the factors affecting this are many, especially in a volatile political climate, both globally and locally.

Among the influences are the interest rates set by central banks, inflation, a nation’s gross domestic product and trade balance, its debt and to a significant extent, the behaviour of politicians and governments towards both their own and competing economies.

Significant fluctuations in exchange rates, as has been seen over the last couple of years, then start to affect the confidence of investors, currency traders and businesses, increasing the volatility of currency values and stock exchanges.

Two obvious examples have been the plummeting value of £Sterling since June 2016, when the UK voted to leave the EU, despite occasional upticks as the negotiations over the withdrawal agreement dragged on.

Similarly, the engagement of the US President, Donald Trump, in imposing tariffs...

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