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The Biggest Payment Issues Small Businesses Face and How to Navigate Them

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by Startacus Admin


Small business owner facing challenges with payments? Gary Prince, Chief Strategy Officer and Vice Chairman of SimplyPayMe shares insights and tips on how to resolve them. 

You’ve got a lot to deal with as a small business owner. Unlike the larger companies, where managers have the luxury of delegation, daily operational requirements are down to you. And in most instances, some of the biggest difficulties you face will relate to payments.

pexels-oleg-magni-2058147Payments impact almost all areas of your business model. If payments are late or can’t be processed, it impacts operational efficiency. Finding the right payment processing system, one that’s flexible enough to meet your needs but doesn’t bankrupt you with fees, can be surprisingly difficult. And there is the ever-present concern over security. So, how can you navigate the most pressing payment problems?

How small businesses can overcome the four biggest payment issues:

Late Payments

According to the Federation of Small Businesses (FSB), more than 440,000 small firms could be forced out of business by the late payment “crisis”. Almost a third of small businesses (30%) surveyed told the FSB that they had seen the late payment of invoices increase over the last three months, with at least 8% warning that the problem had become so bad that it was threatening the viability of their business. The group is now calling for urgent government intervention to improve the way firms are paid. Not only to help prevent late payments from clients, but also tackling the issues of delayed payments due to the workings of their payment systems.

Customer management has always been a problematic area. And there will always be customers who simply don’t pay, or consistently pay late. Outside of the retail environment, where businesses are charging for services, there are a couple of options to help reduce delays. Escrow systems, for example, allow for the advance payment and holding of funds until a job is complete. Not all customers are keen to adopt this system, and it almost always involves a fee, but it can help to reduce late and non-payment. There are also the options of late payment fees, multi-channel invoicing – removing the ‘oh, sorry, I didn’t see your invoice!’ excuse – and the tactical withdrawal of services.

Addressing the issue of payment system delays is potentially easier than wrestling with customers. It involves researching the best providers. And seeking instant payment solutions, such as Pay by Bank App, which allows businesses to be paid almost instantly

Operational efficiency

Cash may not be King anymore, but cash flow certainly is. And for 74% of small businesses, cash flow is a massive challenge. Impacting the timely payment of suppliers, financial products, bills, rent, and even making payroll. And it comes as no surprise that cash flow is directly impacted by late payments.

photo-1454165804606-c3d57bc86b40 Without taking control of your payments system, and closely managing customer payments, there is no simple way to improve your cash flow and operational efficiency. Of course, you can cut spending, but that can often impact your ability to grow. Studying your cash flow patterns and creating a forecast can be beneficial, helping you to prepare for future dips. But the best thing you can do is to get to grips with your payments.

Digital enablement

Digital enablement is often a daunting prospect for non-tech SMBs. Understanding the process without a dedicated tech team can be difficult. Knowing which systems to implement is far from easy, and outsourcing implementation can be expensive. But not adopting is also not an option for any business looking to build simple scalability into its foundations. That’s why 67% of small businesses want their primary financial institution to work more with financial technology providers to offer more innovative and helpful products and services faster.

The best way for small businesses to approach digital enablement is to assess their current pain points – and those of their customers. Then research the solutions that can answer them. This may lead to the adoption of digital payment systems – moving beyond the traditional debit and credit card payment system, to the acceptance of digital wallets and payment apps. Or it could be the automation of accounts payable systems. Digital enablement is there to support business transformation and growth. Even though it’s not an easy area to master.

Safety and security

Despite the increased focus by banks and crime prevention agencies, fraud is still rife. And security is still a high priority for businesses. Especially when it comes to payments. In fact, according to Mastercard, 81% of small businesses wish someone would proactively alert them to shifts in the cybersecurity landscape and inform them of best practices.

The difficulty with digital is that the space is continuously evolving. This means that as soon as one fraud prevention practice is in place, someone else comes up with a new way to breach security. For businesses, this creates one almighty headache. And the only real option is to work with a payments provider with strong security credentials that can ensure that your website is as secure as it can be.

Gary ImagePayments have always caused problems for small businesses, one way or another. But there’s little comfort in knowing that everyone else is in the same boat. This is where a proactive approach is needed and taking steps to actively manage payments and cash flow is one of the first areas all businesses should be looking at. Finding the right payment system for your business is essential, and understanding your needs and your customer’s needs is what makes a business successful.


Gary Prince is the Chief Strategy Officer and Vice Chairman of SimplyPayMe, an award-winning global payments company whose mobile based payment and business management solution is specifically designed and engineered to meet the growing demands of the underserved SME community.


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Published on: 3rd May 2022

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