Companies urged to confront coming cashflow crisis

Jonathan Dudley Crowe UK

Johnathan Dudley, Partner at national audit, tax, advisory and risk firm, Crowe, warns businesses against sleep walking into a cashflow crisis. As the traditional summer slow payment period combines with a growing credit squeeze and Brexit uncertainty it can create a perfect storm for businesses.

The firm is offering Gloucestershire and Cotswolds SMEs a free two hour confidential, independent consultation with a qualified accountant to review their finances and outline their options.

Dudley, who is Managing Partner of Crowe’s South West office in Cheltenham, said: “At Crowe, we advise many owner-managed and entrepreneurial businesses and passionately believe in the importance of SMEs to our national economy.

“But entrepreneurial businesses and SMEs sometimes do not have the specialist knowledge to understand the short, medium and long-term financial picture and, therefore, can be slow to act. When business is buoyant, this is not so much of a concern, but late action in a credit squeeze could be.”

Dudley said that many owner-managers may have an idea that they will face problems in the autumn, but are not aware of the true extent or indeed what to do about them.

“Times are hard. Earlier in the year, companies stocked up far more than they would normally in the lead up to the original Brexit date. During the summer months they have been using this stock, and hence not ordering further stock from their suppliers.

“This has resulted in very uneven cashflow for their suppliers, and the summer holidays have further reduced production and trading activity, as well as stretching payment terms.”

Dudley said directors need a keen understanding of their business so they can react constructively to the current and emerging trading environment.

“The danger is that if they don’t address the situation themselves, they risk someone else addressing it for them.

“They could find themselves in a position where the only help they receive is an introduction to an insolvency specialist.

“At Crowe, we are independent specialists with a proven track record for helping businesses succeed and navigate through stable and challenging times.

“Our two hour consultation to SMEs can help identify opportunities for cost reduction, finance raising, business rescue, profit improvement and ultimately help secure lasting value.

For more information on how to access Crowe’s free confidential consultation, call 0121 543 1900 or email Johnathan.dudley@crowe.co.uk