Budgets and supply chains strained by end-year cash scramble

A £64bn question hangs over UK business: how to unlock this amount, which is one estimate of the cash that could be freed by speedier payment. The figure traditionally drops sharply at this time of year, as firms struggle to turn more sales into cash and tie up less in inventory. But such short cuts to cost cuts could take expensive revenge in Q1 2008.

A new survey of payment delays suggests that £64bn may be trapped in transit among UK firms – not a sum they can easily spare at a time of tightening short-term credit markets.

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