Poor cash flow is the biggest financial concern for small businesses in the UK this year, as more than a quarter (26 per cent) of businesses reveal they are constantly chasing late payments during the pandemic.
Businesses within the insurance and pensions sector (46 per cent) and charity and voluntary sector (42 per cent) are the most fearful of late payments with nearly half expecting to chase late payment of invoices throughout the year (46 per cent and 42 per cent respectively).
The Business Challenges report, carried out by card payments specialist takepayments limited also uncovered widespread concern on the impact Brexit will have on cash flow, with over a fifth (21 per cent) of small business owners worried about how Brexit will affect their cash flow.
Overall, more than one in ten (15 per cent) businesses say financial challenges will be their biggest concern for the year ahead thanks to the economic crisis caused by Coronavirus and subsequent UK lockdowns.
The wider effects of the global pandemic are clear to see from the report as almost half (49 per cent) of small businesses anticipate their business to make a loss or close in the year ahead.
Businesses within the performing arts (33 per cent), healthcare (32 per cent), creative arts and design (26 per cent), and hospitality and events management (26 per cent) industries are those most expecting to make a loss this year.
The report also revealed potential financial skills gaps in small businesses, with almost one fifth (18 per cent) of business owners and senior decision-makers describing their knowledge of invoicing as ‘limited’ and a further fifth (19 per cent) stating they were not confident using online banking for their business.
Despite the government extending the furlough scheme to help reduce the number of unemployment in the UK and ease the financial strain on businesses owners, three in ten (30 per cent) of business admit they have already let staff members go due to the pandemic and over two fifths (43 per cent) of SMEs admitted using the furlough scheme.
Sandra Rowley at takepayments limited said “Last year proved a challenging time for all businesses and unfortunately the uncertainty has continued into this year. It is concerning that one in four business owners are finding themselves constantly chasing up late payments. It’s not only time consuming for them but it also has a worrying impact on them. Many businesses are struggling so ensuring they have a steady cash flow is imperative to make sure they can pay their bills and their business gets through this pandemic.”