Cash flow is an area of focus for more than nine out of ten of British companies in the second half of this year, according to recent research by American Express Global Corporate Payments.
The finding may seem logical – after all, it makes sense for any business to keep an eye on their cash flow – but the figure of 95% of businesses who list it as a major priority is perhaps an indication that it is a little higher on the agenda than might often be the case.
According to AEGCP, this in turn is a suggestion that British businesses are adopting a “steady and cautious approach” to the rest of 2014, despite burgeoning growth in some areas of the UK economy.
Karen Penney, vice-president and UK general manager at AEGCP, says: “For UK companies, working capital still has a major role to play in giving businesses an advantage.
“Clearly, better management of working capital can free up much-needed liquidity, which can in turn be re-invested into growth initiatives.”
Businesses have been feeling the pinch from both ends of their financial ‘supply chains’, and while some of these pinch-points are showing signs of easing, others are not as yet.
For instance, the survey found that 57% of companies have seen a relaxation in their access to credit; however, 93% have had to deal with delays in receiving customer payments.
The latter is a clear obstacle to maintaining healthy cash flow, and as the economy continues to recover, it is likely that cash flow in general terms will slip down the agenda, perhaps to be replaced by a more specific focus on ensuring prompt payments are made by debtors.