Despite the questionable weather, the peak holiday period of British summertime is upon us and, for many companies; this can mean preparing for a change in business.

An increase in footfall or payment delays during the summer months can seriously affect cashflow and increase a business’s need for working capital – the amount of money that it needs to cover-to-day costs.

For small and medium sized enterprises (SMEs), a change in cashflow can be particularity damaging. Our latest Lloyds Bank Working Capital Index found that firms across the North East have more than £59.6bn tied up in surplus working capital.

And with pressure on working capital at a 13 year high, businesses can’t afford to let a slowdown – no matter how temporary – affect them this summer.

It’s therefore vital that firms have the right procedures in place.

What can businesses do to prepare for the summer months?

Firms typically take a little longer to pay their bills during summer for a number of reasons such as invoices waiting to be approved by customers who are on holiday. This shortfall between paying for raw materials and being paid for finished goods, for example, can put a real strain on sometimes already stretched finances.

Equally, a seasonal business which benefits from extra demand during the summer months could see their orders increase dramatically, requiring them to have more cash available to invest in more stock.

By successfully managing working capital, businesses can shorten this cycle and free up funds that can then be used to invest in inventory or staff, trade overseas and ultimately fund growth.

To help, Lloyds Bank has created a working capital management tool that allows our relationship managers to analyse these cycles with their clients, benchmark them against their peers and identify financial opportunities and challenges.

One of the most obvious steps, but one that often takes a back seat, is making sure that a firm is on top of all of the businesses’ income and expenditure. Not being aware of the money coming in and going out makes cashflow forecasting very difficult, and makes it even tougher to be aware of any delayed invoices that might need chasing.

It’s also advisable for businesses to speak to their customers before the summer begins. While it’s a simple task, many firms might be hesitant to do this. However, contacting clients before the agreed due date to ensure they have received an invoice and to check that everything is in order can iron out any issues or rectify and avoid any potential delays in payment.

Sometimes, however, a slowdown is inevitable. To make sure that a business is equipped to deal with these circumstances, having the right financing in place can help support when a payment is unavoidably delayed.

Invoice finance, for example, allows a business to access up to 90 per cent of the value of an invoice within 24 hours of it being issued, giving businesses the assurance that funding will be available when a third party issue might arise.

Where a new strategy has been put in place to improve working capital, it’s also vital to ensure that it remains in place as the company grows and new staff are brought in. In these circumstances, having a management team whose working capital management structure is thorough and oversees all departments can guarantee continuity as a company grows.

It’s important to remember, however, that any changes made need to be rolled out across the business. All departments need to be on board with their goals aligned with the overarching aim of improving working capital.

All of this may seem time-consuming, but getting your house in order this summer can make a world of difference. Working with a trusted adviser, now is the time to act.

Simon Quin, North East and Scotland area director for Global Transaction Banking, SME at Lloyds Bank Commercial Banking