A survey by YouGov and ACI Worldwide has found that 48 per cent of small to medium-sized businesses in the UK are unhappy with late payments from customers.It also found that the majority of small businesses believe faster payments are crucial to their business success.

The online survey of 100 SMEs found that delayed payments negatively impact the ability of SMEs to conduct their businesses successfully. This has a negative effect on the business for three main reasons:

• 33 per cent of respondents said late payments affect their ability to meet financial obligations on time;
• 17 per cent said late payments have a negative impact on staff up-keep including salaries, expense reimbursement and recruitment; and
• 10 per cent said access to finance is limited for business requirements such as equipment, product development, and research.

The majority of businesses surveyed (95 per cent) believe real-time payments would be useful to them. In fact, over a quarter of respondents (29%) highlight faster payments as the most crucial banking service to business success in the current economic environment.

“For small businesses, delayed and unpredictable cash flow can significantly affect their success,” said Barry Kislingbury, director for solution consulting and immediate payments at ACI Worldwide. He added: “Our research presents a great opportunity for banks working with these businesses to demonstrate the value of their real-time payments offering. This will not only help them grow in the medium-term, but will also strengthen the overall economy in the future.”

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CTMfile Take: Liquidity may be hard to come by but when companies put pressure on the supply chain – effectively borrowing money from smaller suppliers by delaying payments – this inhibits economic growth and starves the smaller and medium-sized businesses. Faster Payments might help but tougher legislation is needed.