Finance Monthly - February 2023

28 Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s Faltering supply chains and cashflow concerns In the UK, COVID-related restrictions are most definitely a thing of the past. However, the protests in China at the end of last year were a stark reminder of the country’s ongoing zero-COVID policy and the restricted freedom of movement. Without getting involved in the human rights dimension of this issue, China’s zeroCOVID policy continues to impact global supply chains. While it’s true that businesses are adapting, they’re doing so by holding more raw materials and finished products for longer — and moving away from just-in-time production. This has implications for cash flow and, therefore, for finance teams. Indeed, cash flow is one of the biggest contributors to company closure and bankruptcy. For this reason, I suggest that finance teams pay even closer attention to order books, delivery schedules, balance sheets, and invoices to avoid unplanned and unmanageable shortfalls. Price rises and greener spending decisions Rising gas, electricity and fuel prices have made for a tough winter, and businesses have had to make difficult decisions — often based on intelligence gathered, interpreted and presented by finance teams. This has made for a tough winter and many difficult decisions — often based on intelligence gathered, interpreted and presented by finance teams. It’s difficult not to let emotions get involved when sharing data that could lead to job cuts, office closures and other hard choices. But my advice would be to present the information logically, accurately and responsibly to make the right decisions — and then help the business to grow stronger and more resilient. While the war in Ukraine plays a significant part in keeping fuel and energy prices high, a lack of long- “The biggest problem for the remainder of this year still comes from inflationary pressures.”

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