With SMEs comprising 99% of all UK businesses, they really are the giants on whose shoulders big business stands.

Yet, despite being the backbone of the UK economy, SMEs are confronted daily with unique problems, obstacles and challenges that impede their entrepreneurial talent and business growth.

Chief among those challenges is maintaining cashflow, the beating heart of a business and without which entrepreneurialism is forced to play second fiddle to growth.

How then is cashflow curbing entrepreneurialism and, crucially, how can we tackle it?

The SME cashflow headache

Being on the precipice in juggling delicate in- and out-flow of cash is a major gripe for SMEs.

According to Aldermore research, SMEs struggle to manage largely because of the challenge of getting paid what is owed to them by customers. Dun & Bradstreet research shone a spotlight on the problem, showing that SMEs being owed £63,881 in late payments is putting the future of 58% at risk.

More alarmingly are the findings by the Small Business Insights index which showed just shy of 50% of SMEs are operating in the red. The report placed the finger of blame squarely on the UK’s biggest firms paying 30-day invoices to SMEs on average after 46 days.

What’s more, there are legislative headaches too. The newly enforced EU Directive forbids retailers from passing on the cost of card payments to customers, which is acting as woodpecker on the cranium of SMEs struggling with cashflow issues.

Furthermore, Aldermore’s estimated four million Britons planning to become self-employed within three years which makes such legislative hurdles a serious obstacle to laying foundations in the early years.

Your customer says jump, you say how high

Unfortunately, SMEs have little choice but to find a solution here given the spreading and embedding of cashless lives in societies all over the world. Indeed, Sweden was reported last year to be 99% cashless and others will soon join the Scandi country in the not so distant future.

But we’re not only seeing a strong direction of travel towards card payments being the go-to medium of payment, it’s also becoming a customer expectation that painpoint-free payments be part of the service the brand provides.

This is in part due to the way we shop – gone are the days where the shopping mall or high street are the main vendors of our purchases as the likes of Just-Eat, Uber and pop-up retailers attest to.

It’s also because bank branches are shutting and ATMs become more infrequent – especially in rural areas, according to research by consumer organisation Which?. – making access to cash increasingly a painpoint in the purchasing experience for SMEs and customers alike.

All cashflow pressures lead to middle-man cutting payments solutions

But where there’s a challenge for SMEs and customers alike, there’s equally an opportunity. ‘Hard cash, spent fast’ can be replaced by ‘digital cash, spent quicker and easier’. A wealth of innovation in the payment solutions space is now making this possible.

For example, payment devices that enable easy and affordable access to card payments via POS terminals are helping SMEs tackle the cashflow problem head on.

Such payment systems really cut out the middle-man and foster confidence among SMEs that they’ll not only be paid instantly, but also dodge costly commitments until they have built up a sustainable revenue base.

Moreover, these solutions go beyond the immediate cashflow snag by allowing for more advanced solutions for SMEs to offer customers a variety of extra services, such as mobile phone top-ups, which help drive additional revenue and footfall.

So why not augment your brand whilst mitigating the problems associated with a lack of instant access to funds as a result of bank clearing and introducing new revenue streams through payment systems.


Andrew Byrne, COO, myPOS Europe