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How a small business can manage cash flow

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By David Stapleton, CEO and founder of online platform TenderSpace 

These are anxious times for many small businesses. With Brexit on the horizon and uncertainty in the political and economic climate, the latest figures from insolvency specialist Begbies Traynor show that there are 300,000 businesses currently in financial distress in the UK.

For a small business, especially if you are a supplier or purchaser in a longer supply chain, it is important you do everything possible to negate the risk of being reliant on other companies, particularly with so many potentially at financial risk.

The construction industry, for instance, is a sector where inspections, quality of work and exact specification can all be called into question, and is sadly notorious for late, reduced or non-payment. Put this alongside the proclivity for a contractor to pay when paid and it is easy to see why the financial situation is critical for many small construction businesses in the UK. But this applies to many other sectors too.


There are some simple ways to avoid conflict, increase transparency and accountability, and weather the current economic uncertainty.

Credit-check suppliers

It is vital that you credit-check potential and existing suppliers, ensuring they are solvent and continue to be so. For a small business, the ability to check the credit rating of potential partners, main contractors and supply companies is an important step in protecting yourself from late or non-payment and is key to avoiding conflict within the supply chain. Use a system that not only credit-checks but also will notify you with any changes. 

Get invoices out on time

 An obvious one, but it is one of the biggest reasons for late payment. It can be tricky to make time for paperwork when you’re caught up on site, but invoices can’t be ignored. Schedule time in your calendar to get invoices out quickly and accurately.

Talk to suppliers and customers

If you use an online accounting service, you can set payment reminders for your clients. And don’t just send invoices – direct communication with the person who actually pays you (an accounts department or the householder) is vital. It’s much easier to ignore paper than it is people. 

Encourage transparency

Today’s technology means businesses can keep track of all aspects of the supply chain, from checking finances, to asking pertinent questions and identifying problems and solutions. Technology can help increase transparency and make the business environment better for the UK’s small businesses. 


Some companies now offer free online “software as a service” tools to help a company navigate its supply chain right through the purchasing and supply process.