Cash flow and late payments are named as the biggest financial concerns for 22% of small business owners in the UK this year. One in four small businesses state that they are constantly chasing late payments, according to a new report.
The annual 2022 business challenges report, carried out by card payments specialist takepayments Limited, surveyed SME business owners and decision-makers across the UK to discover the current small business landscape for the year ahead.
Late payments ultimately lead to a worrying impact on small businesses cash flow according to one in four (25%) SMEs surveyed, so it’s no surprise it’s a top concern for small business owners that are already faced with the financial challenges of the ongoing cost of living crisis.
SME’s within the IT (32%) and leisure, sport and tourism (31%) sector are the businesses that are most concerned when it comes to the impact late payments has on their cash flow.
The Brexit aftermath continues to be felt amongst small businesses, even over a year on, as more than a quarter (28%) expressed their concern on how it will affect their cash flow this year. The report also uncovered widespread concern on lack of knowledge on invoicing and tax, as one in four (25%) small business owners state this as their biggest financial challenge for the year ahead.
This comes as almost a third (32%) of small business owners and senior leaders state they have limited knowledge on invoicing and over a fifth (21%) state they are self-taught when it comes to taxes and invoicing. Overall, one in 10 (9%) businesses say financial challenges will be their biggest concern for the year ahead, a 6% decrease from last year. This comes as February 2022 sees the end of all remaining Covid restrictions in England.
Sandra Rowley at takepayments Limited said: “The past few years have been difficult for business owners across the country. Faced with a mix of Brexit, Covid restrictions and lockdowns, staff and supply issues and now the cost of living crisis, it’s astonishing to see that one in four small businesses state they are constantly chasing late payments.
“Not only do late payments have a worrying financial impact on small businesses, but it is also time-consuming. A steady cash flow is imperative to small businesses who are already feeling the pinch, to ensure they can pay their bills, continue providing their service and ultimately survive these financially pressing times.”
Unpaid Invoice solutions
Thousands of Small Businesses are using Small Business Debt Collection specialists. The cost of using a small business debt collection specialist allows a small business owner to get on with daily tasks and keeps stress at a minimum. Chasing late payments is a time consuming effort not to mention the indirect costs associated.
Millions of small business invoices go unpaid every year. Working with a professional debt collection agency can mitigate the effect of these on a small business. It is estimated that debt collection action could save thousands of SME’s every year.