Brexit Business Finance and Legal Government Information Insolvencies

Stronger Cash Flow Could Relieve Brexit Pessimism

British companies have become more pessimistic about the impact of Brexit on their sales, according to the Bank of England.

 

As the country edges closer to the Brexit deadline next May, anxiety is rising for the post-Brexit landscape. Since the referendum back in 2016, EU workers have departed, leaving construction and manufacturing sectors struggling with persistent skills shortages and low business confidence. Both consumers and business owners have also been left with a sentiment of uncertainty and caution.  Despite recent upturns in the economy and slow progress on trade talks with Brussels, the negative opinion of Brexit is still felt.

A report from the Bank’s 12 regional agents has revealed that 49 per cent of companies polled from February to April expect Brexit to have a negative effect on sales at home and abroad, compared with 42 per cent in the same period a year ago. The survey was the result of a discussion between the Bank’s agents and thousands of businesses across the UK, and across all sectors of the economy. The results illustrate how Brexit changed the business landscape, with its uncertain prospects encouraging hesitation with investment and general cautious behaviour.

The issue lies with self-assurance, or at least, the lack of it. Britain’s decision to leave the EU ate away at business confidence, with trade relationships and border mobility not immediately clear. The fear of an economic shift has guided business owners into self-doubt, and their business has suffered as a result. At the Credit Protection Association, we make an effort to restore financial confidence and stability. Our debt recovery services chase down unpaid invoices and award our Members with the financial assurance not only to reach the Brexit deadline next year but to proceed forward into the foreseeable future.

The report found that, on average, businesses expected around 3 per cent to be wiped off sales due to Brexit. Of the 4,000 companies polled, the 10 per cent most pessimistic expected a drop of 10 per cent in sales, while the most optimistic 10 per cent expected Brexit to boost sales by only 1 per cent.

The agents said Brexit was affecting businesses’ current investment decisions, especially among consumer-facing businesses where employment intentions are at their weakest level for this sector since 2009.

According to the report, suppliers of credit to consumer-facing businesses had also reported an “increased incidence of bad debts” and were expecting continued company voluntary arrangements (CVAs) and administrations as rising costs and over-supply put pressure on balance sheets.

A number of high street names and restaurants have been forced to enter into CVAs since the start of the year, including House of Fraser, Prezzo, New Look, Carpetright and Byron (left). Large businesses with an international focus were cutting back on investment due to uncertainty. 

Brexit uncertainty has lingered over businesses since 2016, inspiring anxiety and hesitancy in business owners; particularly in concern to investors. The easiest route to business confidence is through cash flow. This does not mean merely lining pockets with more cash. Instead, businesses should focus on improving business finances and ensuring they have the capacity to survive the economic and political downturns that await the next few years.

At the Credit Protection, our debt recovery services free up cash flow and recover unpaid invoices and renew our Members’ confidence in their own finances. This is not enough, however, and our credit checks and credit reports ensure this new financial power is secured and will not be uprooted through late payers and bad payment practices.

Here at CPA, we fight to the tooth for our members, particularly those who have suffered through late payment and bad payment practices. We have even created a new department within our company dedicated to getting our members rightly compensated in accordance with the Late Payment of Commercial Debts (Interest) Act 1998. This has unlocked hidden cash and potential for our members and brightened their prospects and confidence on the high street.

 

Please call us on 0330 053 9263 to discuss how CPA can help your cashflow.
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