Tax & admin · 4 January 2018

Guaranteed payment date tops cash flow wish list for small business owners

What is bad debt?
Working capital shortage was cited as a greater issue than high overhead costs and customer contracts
The ability to guarantee a date when paymentis received by a customer would be themost effective solution to cash flow worries forowners of small UK companies, according to new survey findings.

Asconcerns over working capital continue to keep two thirds of Britain’s small and micro business owners awake at night with half a working day each week dedicated to cash flow activities tacklingthenation’s late payment culture has emerged as the central priority.

Barclaycard surveyed over 1, 000 decision makers at small UK firms to find that greater control over invoices was the most popular solution to working capital woes.

A quarter of respondents saida guaranteedpaymentdate froma client would have abiggerimpact than protecting accounts receivable regardless of external factors, such as a customer going out of business (16 per cent), or having broader options for paying suppliers (14 per cent).

Meanwhile, a fifth of small business owners citedlow cash flow as a major obstacle to growth second only to economic and political uncertainty. A shortage of working capital ranked as a bigger concern than both high overhead costs and worries around customer contracts.

Commenting on the research, Marc Pettican, managing director of Barclaycard Commercial Payments, said the findings confirmed working capital as a “top priority” for small business owners, “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.

War on late payments

Tightening the UK’s supply chain practices could be a prominent battle in 2018, with the government’s late payment tsar now inviting small business owners to submit invoicing complaintsand the Federation of Small Businesses (FSB) also setting the tone for the year ahead.



Praseeda Nair is an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.