UK's biggest companies sitting on £64bn stockpile

Invoice finance facilities are ideally suited to businesses requiring credit to help counter the effect of late payments

A new survey by Deloitte has revealed that the UK’s biggest companies have built up a £64bn cash pile. However, payments to suppliers are being delayed as a consequence of their desire to build up working capital.

The report, entitled ‘Working Capital: the £64bn question’, indicated that the capital level of UK companies is rising, up from £61bn in 2010 and £59bn in 2009.

Debtors are being paid, on average, a week later in 2011 than two years earlier, as companies look to maintain their working capital levels.

Deloitte warned that this approach could lead to issues in the future with supplier relations, costs and viability.

If some of the cash pile was released, it could be used to help fund growth and counteract temporary market downturns, according to Andrew Harris, partner in Deloitte’s advisory development group.

Andrew Harris said, “The paradox is that, with the appropriate focus, working capital can be one of the cheapest and most accessible forms of funding available to a business.”

“It is our experience that a significant amount of working capital can be released without adversely impacting the underlying business,” Harris concluded.