Preparing for financial uncertainty? – a blog by Philip King FCICM
23 March 2017
We now know that Article 50 will be triggered on Wednesday 29 March and the real journey towards Brexit will commence. I’ve written previously about all the parallel negotiations that will be taking place, and I believe we’ll see the real impact of Brexit over the next couple of years and beyond. All we’ve seen so far is the impact of the Brexit referendum and that’s not the same thing at all.
Having said that, I think we’ll look back in a few years and wonder what all the fuss was about. Businesses are, for the most part, resilient and find ways to overcome the turmoil and obstacles they face. Who’d have thought it’s almost 10 years since the collapse of Northern Rock that started the financial crisis and the worst recession for decades?
What Brexit really means to businesses is difficult to predict, but we are entering a period of real uncertainty. In February the CICM launched an eleventh guide in its Managing Cashflow Guides series ‘Managing cash through Brexit’ and it can be found here along with the other Guides.
We published this new Guide in association with the Federation of Small Businesses to provide advice on how to prepare for, and manage through, the uncertain times that lie ahead. The original Guides were published in 2008 on behalf of what is now the Department for Business, Energy and Industrial Strategy (BEIS) to help businesses manage their cashflow through the financial crisis.
The CICM is proud of its engagement with BEIS advising on policy, providing support and guidance to business, and hosting the Prompt Payment Code to drive cultural change. It is the centre of expertise on all credit-related matters and is recognised as such across the government and business organisation communities. Credit management is a vital profession.
The financial crisis was a time of uncertainty for business and the Brexit negotiation period will be no less uncertain. Managing cash and credit is therefore more important than ever. Running out of cash is a risk to avoid if businesses are going to survive. When they run out of cash and can’t pay the wages, the rent, or a key supplier, businesses fail.
Good credit management mitigates these risks by ensuring that the basic principles are followed effectively, that sales opportunities are identified and maximised, and that the risk of non-payment and bad debts is minimised. It is essential, therefore, to employ credit professionals who are skilled, qualified and good at what they do. In short, members of the Chartered Institute of Credit Management who have demonstrated their ability and expertise.
As part of Credit Week, next week, the CICM is hosting a series of webinars, one of which is focused specifically on the Managing Cashflow Guides, and details are here. If you’re in any doubt about why credit management is so vital, I’d urge you to register for some of these webinars. Credit management and credit professionals are going to be worth their weight in gold.