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SME supply chains feel the strain due to Covid-19

Date

18 Jun 2020

Sections

InfoSociety

More SMEs are changing their credit terms with their suppliers due to Covid-19, finds the latest results from the ACCA UK and The Corporate Finance Network (The CFN) SME Health Tracker.

The survey of accountants, representing nearly 19,000 SME clients, also shows that the current business environment of opening up is slowly easing the intense strain on anxious SMEs - 69% of accountants reported their SME clients had shared feelings of being more stressed and anxious than usual, compared to a Tracker high of 75% last week.

This week’s Tracker reveals a new pressure on SMEs - managing their credit terms with suppliers. 32% are changing their terms, a necessity at this time due to concerns about the financial stability of their customers and to protect liquidity in their own business.

The results which closed on the 17 June also show:

  • 2.9% of SMEs say they’ve decided to liquidate their business.
  • 15% say they feel that social distancing requirements as they currently stand will make it impossible/ unviable to reopen their business – compared to 12% last week. This is a sign of reality kicking-in for many SMEs.

Kirsty McGregor, founder of The CFN network comments: ‘Altering credit terms needs to be handled very carefully to balance the equation of protecting relationships while also ensuring cash flow is more secure. SMEs often have a delicate supply chain and this has become all the more fragile due to Covid-19. This is the reality of where SMEs are right now – it’s a way to protect a business’s cashflow and liquidity and is an indication of loans not working for some.’

Claire Bennison, head of ACCA UK adds: ‘Tracking the wellbeing of SME owners has been sobering. Accountants are hearing first-hand from their SME clients about their concerns and fears, and while we’ve seen a decline in sentiment this week, the feedback is still alarming. We predict this will fluctuate in coming weeks as SMEs experience the reality of what unlocking truly means for them and the UK economy.’

- ends -

For media enquiries, contact:

Maurice Richmond
E: maurice.richmond@accaglobal.com
T: +44 (0)20 7059 5138
M: +44 (0)7802 951 809
Twitter: @ACCANews
www.accaglobal.com

Helen Thompson

E: helen.thompson@accaglobal.com

T: +44 (0)20 7059 5759

M: +44 (0)7725 498 654
Twitter @ACCANews
www.accaglobal.com

Notes to Editors

About the ACCA UK and The CFN SME Health Tracker: The expert panel of accountants polled represent 18,923 clients across the UK and the poll closed on the afternoon of 17 June 2020.

About SMEs: SMEs, (typically less than 250 employees), account for 99.9% of the private sector employment in the UK and there are 22 million employees working for these private sector businesses.

About ACCAACCA is the Association of Chartered Certified Accountants. We’re a thriving global community of 227,000 members and 544,000 future members based in 176 countries that upholds the highest professional and ethical values.

We believe that accountancy is a cornerstone profession of society that supports both public and private sectors. That’s why we’re committed to the development of a strong global accountancy profession and the many benefits that this brings to society and individuals.

Since 1904 being a force for public good has been embedded in our purpose. And because we’re a not-for-profit organisation, we build a sustainable global profession by re-investing our surplus to deliver member value and develop the profession for the next generation.

Through our world leading ACCA Qualification, we offer everyone everywhere the opportunity to experience a rewarding career in accountancy, finance and management. And using our respected research, we lead the profession by answering today’s questions and preparing us for tomorrow.

Find out more about us at www.accaglobal.com

About The Corporate Finance Network

The Corporate Finance Network – www.thecfn.org.uk - The Corporate Finance Network consists of some of the most proactive and commercially astute regional, independent accountancy firms in the UK. They specialise in providing corporate finance advice for smaller transactions.  Kirsty McGregor can be contacted at info@TheCFN.org.uk

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