With UK liquidations reaching highs of 3,689 during the second quarter of 2008, a level not witnessed in the UK since 2003 , accounting experts working in the field of working capital consultancy are reporting huge increases in demand for professional advice from large companies with a need for company information to improve their cash flow.
“As UK businesses battle to stave off the financial difficulties caused by the credit crunch, many large organisations are reverting to the ‘Law of the Jungle’ to ensure they survive – even if that means jeopardising the survival of smaller organisations,” says Graydon UK.
Graydon UK credit management is now urging small firms to seek working capital advice to enhance their chances of survival in the current climate.
In an economic environment where UK small firms need all the support they can get to survive, this strengthening of their cash positions by big corporates can only come at the detriment of those small businesses which are failing to access such specialist advice.
Martin Williams, Managing Director, Graydon UK says: “Companies can vastly improve their cashflow situation by negotiating or in some cases imposing extended payment terms on their suppliers whilst at the same time honing their skills at collecting money at the other end from their customers. As a result, their financial position strengthens at the expense of those smaller companies around them.”
“It all comes down to the ‘Law of the Jungle’, where only the most resourceful survive. Larger businesses are taking the initiative, looking out for themselves, and seeking professional advice on how best to do this.
"In order to avoid becoming yet another insolvency statistic, small firms in the UK must also seek out this expert advice to counteract what they often lack in terms of resource with regard to credit management.”
John Wright, Federation of Small Businesses National Chairman agrees: “Big companies appear to be aware that small businesses are afraid of taking them on over payment terms and are abusing their power as a result. Making small businesses wait 105 days for payment and charging them for the privilege of doing so is nothing short of outrageous.
“At a time when small businesses are finding it difficult to deal with a slowing economy and rising costs, it is shocking that large companies think it is acceptable to use them as an unofficial source of credit.”
Martin Williams adds: “It’s dog eat dog out there. Small firms must act now and seek guidance from credit rating reports, local advisers, accountants and banks who will give them the appropriate resources to really fight their corner.”
For further information contact:
Stephen Finch / Giles Robinson
Weber Shandwick Financial
Phone: 020 7067 0705 / 020 7067 0734
Email: firstname.lastname@example.org / email@example.com
Graydon UK Limited
Phone: 020 8515 1400
Notes to Editors:
About Graydon UK
Graydon UK is one of the leading database information providers specialising in credit risk management and risk assessed marketing lists. The company helps clients reduce the uncertainty of doing business by providing a complete, differentiated and high-quality package of credit risk management services. Graydon provides access to credit information and reports on companies in more than 130 countries worldwide. The Graydon group is owned by Atradius, Coface and Euler Hermes, three of Europe's leading credit insurance organisation. www.graydon.co.uk
About the FSB
The FSB is Britain's biggest business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at www.fsb.org.uk.
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