Cash flow concerns keep six in ten SME leaders awake at night

63 per cent of SME decision-makers worry about their business’ cash flow
SMEs spend an average of half a working day every week on cash flow activities, while a guaranteed date for payment tops their working capital wish-list
Taking control of cash flow could unlock opportunities, as one-third say insufficient working capital has prevented them from growing their business

Cash flow worries keep more than six in ten (63 per cent) SME decision-makers awake at night, with concerns about late payments specifically cited by one in three (32 per cent), new research has revealed.

One in ten (11 per cent) say they’ve even considered giving up their business as a result of worry about late payments, and money management is not only stressful, it’s time-consuming: SMEs spend an average of half a working day every week (3.9 hours) on cash flow activities.

The study from Barclaycard, which has helped make businesses successful for more than 50 years, also finds that a fifth (20 per cent) of small businesses cite cash flow as one of the biggest day-to-day obstacles impeding business growth, second only to the current economic and political uncertainty. In fact, working capital ranked higher than other common hurdles including high overhead costs (19 per cent) and worries around customer contracts (18 per cent).

The high level of worry about money amongst SME decision-makers highlights a need for solutions that will give them greater control over their financial situation. Securing this control could offer businesses the flexibility they need to take advantage of an unexpected sales opportunity or increased seasonal demand, safe in the knowledge that working capital won’t be a barrier to success.

Unlocking opportunities
Removing traditional cash flow pain-points could not only improve an SME’s financial situation, it also offers wider business benefits. Today, a third (32 per cent) of SMEs admit insufficient working capital has prevented them from growing their business.

Of these, nearly three in ten said that cash flow issues had stopped them expanding their product range (27 per cent) and attracting new customers (27 per cent). Almost a quarter (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. With greater control over cash flow, SMEs could enjoy the flexibility and freedom to invest for success and take positive action to develop their businesses.

The cash flow wish list
The need for control is reflected in the SME’s cash flow ‘wish list’: the most popular solution for reducing working capital woes, chosen by a quarter (25 per cent) of small businesses, 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. Having a broader range of options for paying suppliers (14 per cent) rounded out the top three, suggesting that some pain-points could be resolved by improving ways to both take – and make – payments.

Marc Pettican, Managing Director of Barclaycard Commercial Payments, said:
“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. 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.”

Notes to editors

For more information, please contact Linda Yang, Senior Public Relations Manager, Barclaycard, on +44 (0) 20 3555 5586 or siyuanlinda.yang@barclaycard.co.uk.

Online interviews were carried out with 1,001 UK SME decision-makers by Opinium research in August and September 2017.

About Barclaycard

Barclaycard, part of Barclays Bank PLC, is a leading global payment business that helps consumers, retailers and businesses to make and take payments flexibly, and to access short-term credit and point-of-sale finance. In 2016 we processed over £250bn in transactions globally. Barclaycard is a pioneer of new forms of payment and is at the forefront of developing viable contactless and mobile payment schemes for today and cutting-edge forms of payment for the future. We also partner with a wide range of

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