Working-Capital

By Gary Chown, Director of NatWest Commercial Banking

Finding a way to manage working capital efficiently is one of the most important tasks facing SMEs today. Here, we take a look at the difference it can make for your company, and how you can come up with the right formula.

For many SMEs, maintaining cashflow is a huge issue.In a recent survey conducted by payments company BACS, they estimated that more than a million UK SMEs were struggling with late payments, with the average amount owed being £36,000 But the other side of this coin, and one that tends to be much less remarked upon, is how late payment and poor credit control or cashflow management can affect an organisation’s ability to manage its working capital.

This, in turn, is something that can colour not only whether a firm is able to survive but, just as importantly, whether it can take advantage of new opportunities when they arise. It is this ability that will help drive companies – and the country – out of the tough times.

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