CASHFLOW is critical to all businesses. This is particularly true for small and medium sized enterprises (SMEs) who don’t benefit from the financial security that comes with being a large, national or international company. many in fact are living a hand to mouth existence.

Considered the "engine room" of our economic recovery, we must protect SMEs' ability to pay staff and suppliers.

Last week marked the Summer Solstice which not only brings the promise of warmer weather but also a threat to business finances, as delays in payments can be triggered by the holiday period.

In Scotland, there are approximately 360,000 SMEs accounting for 99.4% of private sector companies and 1.2 million jobs. Their bankruptcy as a result of slow or late payments would have a massive impact on the economy.

According to Lloyds Bank’s most recent ‘Business in Britain’ report, SMEs cross the UK are owed nearly £500 billion in outstanding invoices.

While it may often be more convenient for larger companies to slow the payment process, this has a massive knock-on effect for smaller firms and the supply chain. Finding a happy medium system that works for both debtor and creditors, and ultimately the national economy in the long term, is key.

Improved communication with customers can make a significant impact. This could be as simple as a phone call to confirm they received your invoice and when this will be paid can make the difference.

Cashflow forecasting is perhaps the most vital action business or financial leaders can take - this could be planning ahead for summer months as early as Christmas the year before.

Uncertainty that will undoubtedly come with the Brexit result will also have a financial impact on SMEs, particularly exporters.

The construction sector in particular is expected to face significant challenges, especially due to its unique payment structure.

In an industry where payment terms of up to 1,000 days are not unheard of, late payments can create huge risks to a company’s financial security. Customers need to be responsible and support the construction industry – new legislation to drive attitude and behaviour change may be necessary to achieve this.

Business leaders more than ever before need to be vigilant in securing payment and paying staff on time.

Retaining a talented workforce and the firms’ investment in the, has a huge impact on its ability to grow. While wages are often the biggest cost to a business, it’s the most important one to meet on time. No one can be expected to work for a company that doesn’t pay them.

Businesses throughout the supply chain are responsible for making payments on time to allow for a smooth running financial system, and enable economic growth. It is also incumbent on SMEs to take charge and be proactive in making sure their customers pay the bill.

Liz Mcareavey, Acting Chief Executive, Edinburgh Chamber of Commerce