UNCERTAIN TIMES DEMAND UP-TO-DATE INFORMATION
The current economic picture – with downgraded growth forecasts, increased government borrowing costs and global uncertainty around tariffs and conflicts – is filled with uncertainty.
As well as halving their growth forecast for this year to one per cent, the Office for Budget Responsibility (OBR) has also predicted inflation will average 3.2 per cent.
US President Donald Trump’s ‘America first’ tariff strategy is likely to hike prices and dampen the demand for goods and products.
Against this challenging backdrop, which will see businesses continue to face rising costs and sales challenges, it is vital they have clear and up-to-date financial information.
Cash as ever, is king. So, it is really important that projections and cashflow forecasts are accurate and timely and business leaders are on top of their figures.
Businesses need to know which financial controls are likely to be the most effective as they look to manage their finances.
Keep on top of your cash flow forecasts. Take a look at your payment terms and see if they need to be changed to meet the new climate. Have honest conversations with suppliers and customers.
Control your costs. Look at your overheads to make sure you are getting the best deals possible. Assess your office systems and purchasing and ordering processes to make sure you are not incurring unnecessary costs.
Ensure that your stock control is in order and is fit for purpose. Are the right processes in place? Now is a good time to re-evaluate.
Also, be prepared to adapt. As well as looking at areas where costs could be reduced without harming cash inflows, this is a good time to gauge if there are opportunities to be exploited and new markets to explore.
More than ever, in tough times, due diligence on new customers and regular communication with existing ones is really important.
As price increases ripple across supply chains and the potential for a downturn in consumer spending looms, staying close to customers and effective cost control will be of increasing importance.
To discuss any issues raised by this article please contact me on 01772 430000
