Businesses urged to focus on 'effective cash flow management'

Businesses have been advised to focus on effective cash flow management as the credit crunch continues to affect business confidence.

The call comes in the wake of figures from the Institute of Chartered Accountants in England and Wales (ICAEW) indicating that business confidence in the banking, finance and insurance sector has fallen to an all-time low.

These sectors have seen confidence decline to a record low of 37.6, more than three points compared to the last quarter, according to ICAEW's latest Business Confidence Monitor (BCM).

"As an increased number of businesses express concern over late payment, effective cash flow management is now more essential than ever for those sectors with rising input costs, such as manufacturing and transport & storage," said Robin Fieth.

The overall BCM Confidence Index saw a decline of more than five points to settle at 25.7 compared to 19.7 in the previous quarter.

According to ICAEW, the economy is facing its most difficult period since the early 1990s.