57% of UK’s small businesses have cash flow issues

London, UK - 1 February 2019

A survey^[1] from accounting software Intuit QuickBooks found that three in five UK small business owners have experienced problems with their companies’ cash flow. The research also found small business owners forced to turn work down lost on average up to £26,000.

Cash flow issues can be caused by late payments by clients and customers, declines in sales and a lack of rigorous cash management. Problems with cash flow seriously endanger a small business’s bottom line, and can even result in management being unable to pay staff and suppliers.

The research found that 71%, of UK small business owners have been kept up at night by concerns about cash flow and on average, UK small businesses have £31,055 in debts owed to them

Small businesses in the UK are worth an average of £90,000^[2] and if businesses are to keep on top of their cash flow, every cost and output needs to be accounted for. Cloud accounting software can help small business owners keep track of their invoicing and bills in a simple, user-friendly format.

QuickBooks’ platform helps businesses get paid faster, with less hassle, so they have funds to run and grow. Raising an invoice on mobile gets people paid after an average of eight days, instead of 28 and digital bookkeeping ensures every time an invoice is sent, a customer makes a payment or an employee gets paid, the information is tracked and updated.

The survey also found that:

• 38% of UK small business owners who have had cash flow issues, have been left unable to pay loans, themselves or their employees;

• 54% of UK small business owners manually calculate in programs such as Excel to track their business’s bill payments. Using Excel leaves businesses at risk of important information, such as expenses, falling through the cracks.

As the March 31 deadline for Making Tax Digital (MTD) looms, now is the time for small businesses to fully embrace digital to make their accounting processes – and by extension their lives - easier.

Shaun Shirazian, Head of Product, Europe at QuickBooks, says: “Cash flow is a key consideration for small business owners - no one wants to be tossing and turning worrying about access to capital.  In today’s tough economic climate, operating margins are thin and firms missing out on new business opportunities are at risk of going under.

It’s now time to realise digitisation is not a nice to have, but essential to the existence of any company. Small business owners need to adopt cashless systems and practices to ensure they’re not left behind. 

Cloud accounting apps make it easier for owners to organise all their finances in one place, leaving them to focus on what’s really important – running their business.”

Sources

^[1]Survey running from 5th - 19th October 2018 commissioned by Intuit, from a sample of 500 UK small business owners, (businesses with 0-100 employees) findings rounded to the nearest thousand

^[2]https://kpmgsmallbusiness.co.uk/news/how-much-is-your-small-business-worth

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