CASH flow concerns keep 63 per cent of small business bosses awake at night, with a third admitting that insufficient working capital has stunted their growth plans.
New research from Barclaycard, released on Monday, showed that small- and medium-sized enterprises (SMEs) spend an average of half a working day every week on cash flow activities.
32 per cent of SME decision makers specifically cited concerns about late payments, with 11 per cent saying they’ve considered giving up their business as a result.
Among the SMEs who said that cash flow problems had prevented them from scaling up, 27 per cent said that it had stopped them expanding their product range and the same percentage said it had stopped them attracting new customers. 23 per cent were held back from investing in new technologies to support their business, and a similar proportion (22 per cent) were prevented from opening a new office or location.
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The most popular solution to working capital woes, cited by 25 per cent of SMEs, is the ability to guarantee a date when payments would be received from a customer.
This is followed by being able to protect their accounts receivable regardless of external factors (16 per cent) such as a customer going out of business, followed by having a broader range of options for paying suppliers (14 per cent).
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“Our research shows that working capital is a top priority for many SME decision-makers, with almost two thirds saying cash flow keeps them awake at night and a third indicating it has impaired their ability to grow,” said Marc Pettican, managing director of Barclaycard Commercial Payments.
“This situation is wholly preventable with the right support, and we encourage small businesses to explore how they can reduce the time and energy they spend on managing working capital problems.
“Whether they are looking for a solution to help them seize a new sales opportunity or invest in new business technology, there are a variety of SME-friendly solutions out there, from a corporate credit card to a business loan. These will help small businesses gain greater control of their cash and reap the benefits that flow from it.”
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