Late invoices are the primary culprit for causing cash flow problems for businesses according to two fifths (41%) of UK small and medium-sized enterprises (SMEs) while making sure the bills are paid was an issue for a third (32%) and having access to emergency cash (21%) was also top of the list. That’s according to Allstar, one of the UK’s leading business, EV and fuel expense payment companies, which researched the issues plaguing the nation’s small businesses.

Blue Monday, coined the “most depressing day of the year” has very real implications across the board with the post-holiday season leaving many with squeezed pay packets and budgets. Given 80% of workers said that they are more productive when they are healthy and happy, Blue Monday may even result in reduced productivity, impacting and adding even more strain on businesses which may already feeling the pinch when it comes to cash flow.

Late payments are costing small businesses £22,000 a year on average, with the government announcing the New Fair Payment Code. This will include new measures and a consultation to combat the issue, which leads to 50,000 business closures a year.

Allstar’s research, which surveyed 500 UK SME business owners and decision makers, completed with Censuswide, found that over half (54%) cite cash flow an issue and up to 70% say that the burden of cash flow and admin has significantly hampered business growth.

Cash flows are being impacted predominantly by inefficiencies, and just over half say they spend up to 6 hours managing costs and their cash flow. Burdened with a daily onslaught of challenges including cash flow management, SME owners are now more than ever on the lookout for little wins that make their lives easier by removing points of friction and simplification. More than a quarter (28%) said that faster payment of invoices is the key to helping their business save time, and 27% say it would solve admin and cash flow problems.

At what is a particularly tough time of the year, businesses could drive down their cash flow headaches by harnessing the latest tools and products that could give customers up to 44 days interest free credit on all business purchases*, like Allstar’s all-in-one solution. Allstar Plus could help to make business payments and expenses easier to manage, as one relationship creates ‘less work’.

Paul Holland, Managing Director for UK/ANZ Fleet at Corpay, including UK brand, Allstar, said: “It’s a tough climate for the UK’s SMEs; our insights show that one of the biggest issues that are impacting cash flow are late payments, something that kills 50,000 businesses in the UK every year. And while Blue Monday might not be grounded in science there is a lot to be said for the change in behaviours and attitudes around this time of year.” 

“Business owners and proprietors can take a proactive approach to mitigating these issues, with the aim of simplifying their operations and improving efficiencies, making these arduous tasks less work. An all-in-one solution achieves this by enabling more simplicity and easier management.”

“In doing so, SMEs can re-focus their attention to those big-ticket items that require their expertise and attention and will ultimately mean the business can focus on its own success and that of the economy. This way we all thrive.”