Cash flow pressures ease for small businesses

Late payment improved in the final quarter of 2011 with the biggest difference coming from the largest firms, research finds.

The payment performance of UK companies moved from an average of 26.17 days in Q3 2011 to 25.97 days in Q4.

Firms with 101 to 500 employees paid their invoices three quarters of a day faster than in the previous quarter (from 25.84 days to 25.07 days), while firms with more than 501 employees improved by two thirds of a day (from 34.77 days to 34.12 days).

These businesses also led the way in improvements when compared to their payment performance in Q4 2010. Firms with more than 501 employees settled their invoices almost two days faster while firms with 101 to 500 employees improved by almost three quarters of a day, from 36.06 days and 25.79 days in Q4 2010, respectively.

Jason Mills, head of payment performance at Experian UK & Ireland says, ‘Payment performance is the timeliest indicator of the current health of any business, so the overall improvement suggests that during the last three months of 2011, pressure on cash flow and finances was more manageable for most businesses.'

27 Jan 2012 | 10:53 am UTC

SMEs warned of tax return deadline

UK small business owners could lose £45 million on 1 February by failing to complete their tax returns by 31 January deadline.

The warning from accounting software company Kashflow comes as an influx of businesses are struggling ahead of the final deadline for submitting tax returns.

A recent survey of 500 small businesses found that one in ten business owners admitted to missing tax return deadlines. With 4.5 million small businesses in the UK this means that 450,000 small business owners are likely to miss their tax return deadline at the end of this month, with the smallest fine incurred for missing the deadline £100 for being just one day late.

Duane Jackson, founder and CEO of KashFlow, says, ‘I find it truly astonishing that in today’s climate such a huge amount of money is being put at risk by UK business owners. As a small businesses owner myself, I understand the plethora of pressures faced by businesses today, yet adding another financial burden by missing a deadline will only worsen the strain in the long run.'

Will Farnell, director at accountancy firm Farnell Clarke adds, ‘When it comes to accounts, it can be easy for small business owners to neglect time consuming and cumbersome jobs which require manual completion. But I believe these bad habits need to be challenged.’ 

27 Jan 2012 | 10:06 am UTC

Retail suffers in 2011

Retail sales fell in the year to January despite modest growth last month, finds the Confederation of British Industry (CBI).

According to the latest monthly CBI Distributive Trades Survey covering the first two weeks in January, 44 per cent of retailers saw sales volumes fall on a year ago, while 22 per cent reported a rise, giving a balance of -22 per cent.

Retailers reported that sales were disappointing for the time of year, with a balance of -20, and orders were also down (-14), with firms expecting levels to fall again next month (-23).

Most sectors reported a fall in sales volumes on a year ago, including hardware & DIY (-80) and non-specialised retailers such as department stores (-34).

However, grocers saw a modest increase in sales (+6), following a much stronger trading period in December (+52). The non-store category, which includes online and mail-order, performed well (+50).

Ian McCafferty, CBI chief economic adviser Ian McCafferty says, ‘Shoppers have reined in spending across the board at the start of the New Year after taking advantage of early discounting last month, which boosted pre-Christmas sales.

‘Consumers are still holding off particularly from buying big ticket items like washing machines and fridges. Online and mail order sales were the only areas that performed well in January, but growth was still down on last month.’

26 Jan 2012 | 1:46 pm UTC

Nameless CVs for fairer hiring

Businesses should encourage all job applicants to send in CVs that do not identify their name or ethnic background, says an employment law specialist.

Michael Slade, managing director of Bibby Consulting & Support, says that the measure would give companies immunity to discrimination claims.

Slade's comments follow news that more than 100 major UK companies have agreed with a government suggestion that CVs and application forms should not show a school's name or identify a candidate's ethnicity, to eliminate any chance of discrimination during the application process.

According to the government, applicants could be disadvantaged if they put on their application form the name of a school that doesn't have a good reputation. At the same time, their ethnicity should be irrelevant to their suitability for a post.

Says Slade, ‘It is very important that business owners are seen to be 100 per cent fair when taking on new employees, so the recruitment and selection process needs to be able to prove that a person got the job based on their ability and not where they came from.

‘The deputy prime minister has gone on record as saying that getting a job should be about 'what you know, not who you know' and we couldn't agree more. So it is absolutely vital that companies reflect this approach and design their selection processes to avoid the risk of discrimination claims.’

25 Jan 2012 | 3:08 pm UTC

British leaders more upbeat than Europeans

UK CEOs are more optimistic about their companies’ fortunes than their European counterparts, finds research.

Some 79 per cent of UK managers are upbeat about revenue growth in the next year compared with 64 per cent of CEOs surveyed across Eurozone countries, according to PricewaterhouseCooper’s annual global survey of more than 1,200 companies.

While only 29 per cent of UK CEOs are ‘very confident’ of growth in the next 12 months, 46 per cent are very confident over the next three years and at least 92 per cent ‘somewhat confident’ of growth over three years.

Overall, UK business leaders say the outlook for global economic conditions remains challenging, with 89 per cent of UK CEOs believing they will not improve, or decline further in 2012.

Ian Powell, PwC chairman says, ‘Our prognosis is that CEOs should expect the current pattern of volatile financial markets and relatively slow growth in western economics to continue. The challenge for the UK CEO is ensuring that their companies remain flexible, maintain cost controls and restructure to adapt to this slower growth environment.’

UK CEOs say their best chance for growth in the next 12 months is more likely to come from increasing their share in existing markets, with less than a quarter (22 per cent) looking for growth from new products or services, and 18 per cent from new geographic markets.

Adds Powell, ‘Growth opportunities still exist, particularly in faster growing emerging market economies and where new technology is opening up possibilities – in areas as diverse as online retailing and low carbon energy.

‘The challenge now is to ensure that the experience of slower growth in traditional markets and the uncertainty created by more volatility does not prevent them taking advantage of these areas of new opportunity.’

25 Jan 2012 | 12:19 pm UTC