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Stronger Cash Flow Could Boost Lagging Productivity

In the decade since the financial crisis, the capital’s productivity has shrunk by 1 per cent compared with growth of 1.5 per cent across the UK, analysis by the Resolution Foundation found.

 

Productivity levels within the UK have been lagging, with Brexit uncertainty weighing heavily on the shoulders of employees and business owners alike. Business confidence has suffered as a result of the uncertainty, and workers have struggled to garner enough conviction to improve work output.

Unfortunately, as London boasts the strongest business community in the country, and therefore must brunt the majority of the pressure. The success of UK businesses is heavily reliant on the productivity its employees prove to be, with output directly linked to profits and sales. With retailers leaving the high street at an accelerated pace, and insolvencies slowly increasing on the year, businesses must do their best to retain longevity.

As with most business obstacles, productivity can be improved through the attainment of more cash. Purchasing new equipment, technology or building a larger workforce can ease the daily grind for employees, and help increase output from individuals. At the Credit Protection Association, many of our Members have used our debt recovery services to fund office renovations or launch employee trainee initiatives, all with the intention of easing the lives of their employees.

London is by far the most productive region in Britain but, rather than pulling further away since 2008, it has given up ground on a gross value-added per hour worked basis.

Its economy has grown by 17 per cent since 2007, more than the 8 per cent achieved for the UK as a whole, but that has been driven entirely by rising employment and hours rather than productivity.

 

Part of the reason for lagging productivity has been that the jobs growth has been in low-paying, low-productivity sectors, such as hospitality and administrative services.

Until trade deals with Brussels have been settled, political uncertainty will continue to linger over British businesses. Business owners can transform this anxiety into opportunity, by freeing up cash flow and investing in improving their work environment.

A more supportive work environment will create a more pliable and energised workforce and should lead to stronger output and profits. Productivity may be lagging but it is not beyond improvement, and businesses can do their part to help.

At the Credit Protection Association, we understand how economic and political downturns can be a drain on productivity. Inflation has been historically high and has driven many businesses into sluggish performance. Now that inflation has faded and wage growth has accelerated, productivity has now the space to grow. Businesses can encourage this by freeing up their cash flow, and using debt recovery services that credit management companies like CPA can provide.

At CPA, our debt recovery services free up cash flow, providing businesses with the financial power to invest in new opportunities and services. Our credit checks, status reports and company directories also protect the business and provide our Members and their employees with more secure future prospects.

 

Please call us on 0330 053 9263 to discuss how CPA can help your cashflow.
Alternatively, either email us or use our contact form.

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