MORE small firms in the region are experiencing cashflow problems, a survey by Lloyds TSB Commercial Finance, claims.
The bi-annual Business in Britain survey says that 35% of North West small companies are experiencing cash flow problems, compared with 28% a year ago.
Of the companies hampered by cashflow difficulties, 54% say that late payments are to blame.
The number attributing cashflow problems to late payments has fallen slightly from last year, down from 60%. However, late payments are still the single largest cause of cashflow problems, followed by a fall in demand or lack of business 39%.
Lloyds TSB Commercial Finance is urging companies to sign up to the Prompt Payment Code to ease the pressure of late payments on small firms.
Mike Scowen, regional director for Lloyds TSB Commercial Finance in the North West, said: “Over a third of businesses in the region suffer from poor cashflow, and over half cite late payments as the main cause.”
He added: “There are several things companies can do to ensure that late payments don’t affect their cashflow.
“Prevention is better than cure, so carrying out background checks on customers and setting out clear payment terms at the beginning of the relationship can help avoid any problems before they begin.
“In addition, widespread adoption of the Prompt Payment Code will mean that companies treat suppliers fairly, and late payments will become less endemic.”