CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

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CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

Survey highlights potential for manufacturing SMEs to increase efficiency through better cash flow management

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Manufacturing industries are significantly more likely to have experienced some challenge managing their business cash flow (83%) compared to other industries. PHOTO courtesy PLZ.

Canadian Western Bank (CWB) has released a new study that reveals almost half (42%) of small and medium-businesses (SMEs), including those involved in manufacturing, continue to use manual processes to manage their cash flow.

The majority of businesses (60%) reported ongoing challenges in managing their cash flow, with 18% expressing a challenge in tracking expenses, revenue, and generating accurate forecasts. Delayed invoicing and payments (30%) and managing accounts receivable/payable (26%) were the most common issues.

Manufacturing industries are significantly more likely to have experienced some challenge managing their business’ cash flow (83%) compared to other industries. Two-thirds (66%) agree it is important that their business improves its cash flow management efficiency; 27% find it very important.

Other key survey findings include:

  • The top three reasons given for a business to invest in new software have been identified as: improving productivity (32%), it’s better for managing and analyzing data (30 per cent) and creating efficiencies (28%).
  • Of those who do not currently use cash flow management software, nearly half (46%) would invest in it knowing it could help improve financial processes for their business.
  • Currently, almost half (42%) of SMEs manage their cash flow manually (using spreadsheets, paper records, and/or manual calculations), particularly small businesses with a single employee and businesses with revenues of less than $500K. Just over a third (36%) use accounting software and 26% use banking tools.
  • Businesses are more likely to feel digital technology used by the financial institution they employ for business banking services has either helped (33%) or had no real impact (45%).

“Leveraging data and technology, in combination with advice from a financial services partner, can help businesses relieve cash flow and operational challenges. However, many companies may not be positioned to benefit from modern cash flow management software or a strong financial services relationship, and should explore the advantages of combining data analysis with human expertise for improved business outcomes,” said Stephen Murphy, Group Head, Commercial, Personal and Wealth at Canadian Western Bank.

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