North West Manufacturing – Cash Management is Key

So, how has the manufacturing industry in the North West been coping in 2010 - Has it been hit hard by the recession or showing its strength and pulling through?

My experience in working closely with several manufacturing business in the Lancashire area shows that those businesses which were healthy before the recession are coping well, but some of those which were already struggling have fallen. Through my client meetings and telephone conversations the feeling from manufacturing business owners and management is that it is going to take several years before things get back to how they were before the ‘credit crunch’. Furthermore, there is concern over whether the recession is really over, or are we just limping along?

Management needs to make sure they don’t take their eye off the ball. I believe that the top dogs in the future will be those who concentrate on their cash management policy and look for sustainable business. Where possible they should also dedicate significant time in aiming to move their resources from underperforming contracts into more profitable areas. This sounds very simple, but of course it is far from it. However keeping this ideal in the forefront of your mind will bear fruit in the long term. It is a difficult balancing act, but one which must be pursued to achieve results.

As accountants and tax advisers providing business advice to the manufacturing sector, we at Ashworth Treasure work closely with our clients and play a vital role in business planning, cash management and maximisation of tax relief. We are fully behind the idea of keeping hold of your cash rather than giving it to the taxman!

Many of the manufacturing companies we work with in Lancashire and the North West are becoming aware that financing their businesses is more difficult than in recent years. This is due mainly to bank lending becoming more expensive and difficult to obtain. By focusing time on cash management businesses should be able to keep uncomfortable bank discussions and unexpected charges to a minimum.

We think that the manufacturing sector should be optimistic for the future. If we can manage our liquidity in these difficult times, we should be set up ready for the upturn in the economy which we hope will arrive sooner rather than later.