With the New Year in full swing and the UK manufacturing industry entering yet another year of economic uncertainty, how will your business balance its books?
Increased competition from overseas, political turmoil at home and unforeseen trade wars will give manufacturers plenty to think about over the next twelve months.
In an industry that was once the cornerstone of our economy, late payments are on the rise and SME manufacturers are struggling to scale production.
Join us as we explore why UK manufacturers are struggling and explain how invoice financing can help them stay ahead of the competition.
Manufacturing Finance & Late Payments
One of the biggest manufacturing challenges for SMEs is dealing with late payments from buyers. In 2018 alone, over 50% of all invoice payments by big businesses to SMEs were late.
With experts predicting “little or no improvement” for the UK’s economy in 2020, large corporations are feeling the squeeze. And, as large corporations start to feel the squeeze, manufacturers’ invoices get pushed to the bottom of the to-do lists.
While late payments might not be such a big problem in some industries, the manufacturing industry relies on prompt payments and a constant stream of incoming cash to keep production rolling.
Without prompt payments, manufacturers won’t have the cash to fulfil future orders or take on new customers. So much so, that late payments are estimated to cost UK SMEs as much as £51.5 billion each year.
Luckily, invoice financing can prevent production lines from grinding to a halt by giving SMEs a vital injection of funds when they need it most. Whether it’s buying raw materials, maintaining machinery, or renting storage space, manufacturers rely on steady cash flow to thrive in an increasingly competitive market.
Brexit & Economic Uncertainty
While the ‘B-word’ is something you’re probably tired of hearing about, UK manufacturers need to be hot on their heels to adapt to the changing economic and political landscape.
For better or worse, Brexit will impact the global appetite for trade with the UK and present manufacturers with an economic situation that’s beyond their control.
Although the finer details of an EU-exit are unknown, we can be reasonably certain that manufacturers will find themselves in a unique position as they scramble to negotiate new contracts and manage their finances in these turbulent times.
As Trump’s trade war with China continues and political tensions grow, 2020 promises to be another year of international rivalry for the manufacturing industry.
Manufacturers require consistency and certainty to forecast sales and maintain a healthy balance sheet.
Whether it’s fighting off overseas competition or taking advantage of collapsed trade agreements, adapting to new markets requires access to cash that most businesses don’t have.
If your business doesn’t have the luxury of a financial safety net to fall back on when demand dries up, a bad month can leave you stuck in the mud.
A steady cash flow is essential for keeping production lines ticking over and generating enough cash to fulfil future orders.
Investment in Technology
Possibly one of the biggest disadvantages for manufactures strapped for cash is working with outdated technology.
As international competitors develop cost-effective solutions and advanced machinery to speed-up production and improve quality control, small manufactures risk falling to the wayside.
After all, technological innovations have always played a role in determining the manufacturing industry’s leading players. So,investing in the latest technology is essential if you want to stay ahead of the game and deliver quality products at the right price.
Whether it’s investing in the latest machine learning technologies to reduce errors or using blockchain to ingrain trust into your supply chain, technology can be the difference between success and failure for manufactures in 2020.
Stay Ahead of the Competition with Lendflo
Here at Lendflo, we’re committed to helping SME manufacturers thrive. Within today’s tough marketplace, you sometimes need a helping hand to compete with global rivals, invest in the latest technological developments or weather economic storms.
Whatever 2020 throws your way, we’re here to help manufacturers of all shapes and sizes maintain steady cash flow and offer the best rates on individual invoice financing.
Experience our smart digital platform to quickly access cash and enjoy full integration with your existing accounting software for seamless transactions.
Are you ready to inject your business with the funds it needs to scale production and grow to new heights?
Get your hands on the money you need with advance payments on outstanding invoices from Lendflo.
Discover invoice financing today.