Although economic conditions are showing signs of improvement, these are still very challenging times for businesses.
Inflation has fallen significantly from the double-digit highs seen towards the end of last year - but the interest rate increases the Bank of England introduced to bring inflation under control have not yet started to be reversed. The cost of finance therefore remains high, while other costs have increased too such as a 10% rise in the National Living Wage and a 6.7% uplift in business rates that became effective from April.
As a result, margin squeeze is still a reality for many organisations - meaning that a strong focus on cash and liquidity management is essential. Improvements in the working capital position minimise the need for external financing and provide headroom for business activity and growth.