South East: Cashflow improves as economy recovers, shows Lloyds Bank survey

The number of businesses in the South East experiencing difficulties with their cashflow is falling as confidence in the economy grows, the Lloyds Bank Business in Britain survey has found.

The survey questioned 1,500 small and medium-sized businesses across the UK. It found that less than a quarter (23%) of businesses in the South East now report facing difficulties with cashflow, compared with just under a third (30%) a year ago.

But while the economic recovery is helping businesses manage their finances better, late payments from customers continues to be a problem.

Of those who were experiencing difficulties, more than half (53%) in the South East blame late payments – up from 50% a year ago.

Lloyds Bank has urged companies to sign up to the Prompt Payment Code to ease the pressure on businesses caused by late payments.

Roger Brown, regional director for the South East for Lloyds Bank Commercial Finance, said: “While it is positive to see business confidence returning to the economy, the problems caused by late payment of invoices still affect a large number of businesses.

“Widespread adoption of the Prompt Payment Code would help reduce that problem by making late payments less endemic.

“In the meantime, any business that is struggling with cashflow should carry out more thorough credit checks on customers and set out clear payment terms at the outset of any relationship.

“Invoice finance can also help businesses borrow against the future value of their invoices, helping them avoid payment delays and improve their cashflow.”

Brown added: “While challenges remain in some areas and industries, the overall picture is a positive one as cashflow becomes less of an acute issue for businesses.

“More can still be done to tackle late payment, but equally, companies need to take greater control of their own cashflow and make better use of the many tools that are available to ease the pressures it causes on their business.”