According to Small Business Confidence Index (SBCI), a survey conducted by industry association ASSOCHAM and business consultancy firm Dun & Bradstreet (D&B), reveals that the optimism of small businesses has moderated to 71 points in Q1 2023, compared to the higher confidence levels of 87 points in Q2 2022.
“While the domestic economy remained resilient throughout the year, it recorded a slowdown towards the end of 2022 as a lag effect of global stagflationary pressures,” said the survey.
Small exporters are feeling the impact of the decline in confidence with only 48% expecting an increase in new export orders in Q1 2023 as compared to 86% in Q2 2022.
The outlook for domestic businesses is dwindling too with 67% expecting an increase in sales in Q1 2023, down from 75% in Q2 2022.
Small firms are under greater cost pressure due to rising input costs and a drop in demand, which has an impact on their growth plan and ability to spend.
As a result, only 62 % of respondents intend to make new investments in Q1 2023, compared to 77% in Q2 2022.
Similarly, only 57 % of SMEs expect to hire new employees in Q1 2023, down from 76% in Q2 2022
The outlook for profitability remains on similar lines, with 62% of the respondents anticipating an increase in Q1 2023, down from 77% in Q2 2022.
Lower profitability indicates unpredictable cash flows. During such a difficult operating environment, SMEs should focus on getting their invoices paid on time to ensure survival of their business.
RIABU advocates implementing the Virtuous Revenue Cycle (VRC), one of the key components of which is quick and accurate invoicing, which includes knowing the customer’s needs and having a documented invoicing procedure.
Early customer communication and a speedy process for resolving discrepancies can have a significant impact on accounts receivable and, as a result, guarantee that you are paid on schedule.
Get more tips on effective cash flow management from our book, Let The Cash Flow. To find out more about how RIABU helps small businesses get paid on time, visit RIABU.com
