Firms based in the UK are being hit harder by the credit crunch than their US counterparts, new research shows.
A survey by accountancy firm KPMG reveals that 76 per cent of British firms believe the impact on them is "high", compared to 23 per cent of American companies.
It also found that 49 per cent of businesses are planning to handle the situation by negotiating longer supplier payment terms, while 46 per cent will tighten credit lines to customers.
However, Andrew Ashby, director of KPMG Advisory, believes this is the wrong thing to do.
Mr Ashby said: "Adopting the same old blinkered approach of squeezing your suppliers and delaying payments is a zero sum game where only few winners will emerge."
Firms should instead focus on improving their control of cash and "work smarter across the supply chain" to "reduce the cash cycle for all participants", he added.
Earlier this month, a study by consultants the Hay Group found that just over a quarter of managers have made no strategy changes in order to deal with the economic downturn.
