UK businesses continue to suffer as a result of record fuel prices, in spite of the government’s decision to postpone a rise in fuel duty originally planned for the beginning of the New Year.
The latest Close Business Barometer has today revealed that the rising cost of fuel is taking its toll on 41 per cent of firms across the country.
The increased cost of fuel is just one of a number of issues impacting firms in the UK. Companies up and down the country are struggling to cope under the strain of the current economic landscape which has forced businesses and consumers alike to rein in spending.
David Thomson, Chief Executive of Close Invoice Finance, commented on the problems facing firms saying; “From talking to our clients in all sectors, the general consensus is that rising fuel costs remain one of their main concerns on a daily basis. This is having a huge impact on operating costs for firms of all sizes, with SMEs in particular being hardest hit.
“Bearing in mind that firms are already suffering, having been hit hard by the economic misery of recent years, coupled with consumer confidence being at an all time low, it is not hard to see how increased fuel costs are causing firms a lot of additional pressure, which is ultimately pushing some beyond their limits.”
Unfortunately, one in five businesses are being forced to pass some of these costs onto the people they rely on the most – the customer.
“The fact that these increased costs are having to be passed onto customers does nothing to help companies, who are already struggling to survive, attract new business or hold on to current customers. When increased operating costs are passed down to customers the knock on effect on sales can be huge,” said Mr Thomson.
To make matters worse, businesses are also feeling the squeeze on tougher payment terms. With firms being given less time to pay suppliers and having to wait longer to receive payment from customers, the impact on cash flow is often catastrophic.
Mr Thomson added; “Our research shows that a staggering 53 per cent of firms cite late payments as a major issue for their business. Of these firms, more than one third are forced to wait longer than thirty days for payment.”
“This cycle quite often puts firms under incredible pressure to make ends meet and balance the books, even when outgoings far outweigh incomings. The good news is that help is available, if you know where to look.”
“Invoice finance is an increasingly popular option and helps alleviate many of the cash flow problems currently facing businesses. The beauty of this type of financing is that when firms raise an invoice they receive immediate access to up to 95 per cent of the value of that invoice. This provides companies with the ability to continue operating their business whilst awaiting payment from the customer.
“In the current economic climate the financial freedom and flexibility that invoice finance offers firms can really mean the difference between survival and collapse,” concluded Mr Thomson.