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Home > Business > Getting a grip on cash flow is the key to SME success

Getting a grip on cash flow is the key to SME success

Published by Gbaf News

Posted on July 6, 2018

7 min read

Last updated: January 21, 2026

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Cash flow management remains a cause of stress for small business leaders

New research from American Express reveals cash flow is getting the better of the UK’s small businesses and holding them back from reaching their potential, with almost half (46%) of senior decision makers admitting these challenges are distracting them from growth related activities like product development and marketing. Furthermore, one in five (18%) say keeping on top of financial commitments is taking their focus off chasing down new business opportunities.

The research shows that not having a proper system in place to manage money flowing in and out of their business is leading small and medium enterprises (SMEs) to rely on short-term financial fixes.

A quarter (26%) of SMEs are using a bank overdraft to help them manage their cash flow, while 12% are looking to business loans in order to meet financial commitments, which may not always be the most financially suitable tools at their disposal.

Challenges with fulfilling financial obligations can have an impact on supply chain relationships as well. A third (30%) of SMEs who have missed a payment deadline have had a supplier withhold goods or services and over a quarter (28%) have had their relationship with a supplier they depend on tested. Missing payments can also cause costs to add up for SMEs, with 35% having to pay a fee for doing so.

Despite money matters causing unnecessary worry for small business leaders, with these concerns keeping a quarter (25%) awake at night and a similar (24%) number experiencing symptoms of stress, only half (54%) use an accountant or financial advisor to help them take back control of cash flow.

Carlos Carriedo, Senior Vice President, Global Commercial Services at American Express said: “Getting on top of cash flow doesn’t need to be as challenging as many SMEs might expect and doing so will free up their time to focus on growing their business as well as alleviating personal stress.

“Breaking the cycle of late payments should remain a priority for SMEs to avoid problems being passed down the supply chain. They should definitely explore the full range of financial support and tools at their disposal to crack the cash flow conundrum”.

To help SMEs stay in the black and manage their cash flow efficiently, American Express has put together top tips for business owners:

Review recurring costs – The first step is to cut costs and make sure your cash is being used efficiently by reviewing existing commitments, such as subscriptions or services you no longer need. Regularly review your vendors to see if any new competitors offer better prices, or whether terms on existing contracts can be renegotiated.
Cash in on assets – Equipment or assets that you no longer use can be a source of quick cash. Review your inventory for anything that’s no longer of use or in need of an upgrade that can be sold and eliminate clutter at the same time.
Know your vendor timeframes inside out – Be eagle eyed when it comes to payment timeframes and deadlines for your different vendors. That way, not only will you ensure you don’t miss any payment deadlines but you’ll also keep the cash in your account as long as possible.
Ensure smooth payment process –Using a business credit card that enables you enables you to boost your cash flow through deferred payments terms and earn rewards on business spend, such as the American Express Gold Business Card*, means you can make your money go further.
Don’t delay on invoicing – When work has been completed on a project it can be easy to switch off and turn to more pressing tasks. The longer you take to invoice, the more time you’ll have to wait for a payment to be processed and for cash to arrive in your account. Issue an invoice as soon as work is done every time to cut out any unnecessary payment delays.

Cash flow management remains a cause of stress for small business leaders

New research from American Express reveals cash flow is getting the better of the UK’s small businesses and holding them back from reaching their potential, with almost half (46%) of senior decision makers admitting these challenges are distracting them from growth related activities like product development and marketing. Furthermore, one in five (18%) say keeping on top of financial commitments is taking their focus off chasing down new business opportunities.

The research shows that not having a proper system in place to manage money flowing in and out of their business is leading small and medium enterprises (SMEs) to rely on short-term financial fixes.

A quarter (26%) of SMEs are using a bank overdraft to help them manage their cash flow, while 12% are looking to business loans in order to meet financial commitments, which may not always be the most financially suitable tools at their disposal.

Challenges with fulfilling financial obligations can have an impact on supply chain relationships as well. A third (30%) of SMEs who have missed a payment deadline have had a supplier withhold goods or services and over a quarter (28%) have had their relationship with a supplier they depend on tested. Missing payments can also cause costs to add up for SMEs, with 35% having to pay a fee for doing so.

Despite money matters causing unnecessary worry for small business leaders, with these concerns keeping a quarter (25%) awake at night and a similar (24%) number experiencing symptoms of stress, only half (54%) use an accountant or financial advisor to help them take back control of cash flow.

Carlos Carriedo, Senior Vice President, Global Commercial Services at American Express said: “Getting on top of cash flow doesn’t need to be as challenging as many SMEs might expect and doing so will free up their time to focus on growing their business as well as alleviating personal stress.

“Breaking the cycle of late payments should remain a priority for SMEs to avoid problems being passed down the supply chain. They should definitely explore the full range of financial support and tools at their disposal to crack the cash flow conundrum”.

To help SMEs stay in the black and manage their cash flow efficiently, American Express has put together top tips for business owners:

Review recurring costs – The first step is to cut costs and make sure your cash is being used efficiently by reviewing existing commitments, such as subscriptions or services you no longer need. Regularly review your vendors to see if any new competitors offer better prices, or whether terms on existing contracts can be renegotiated.
Cash in on assets – Equipment or assets that you no longer use can be a source of quick cash. Review your inventory for anything that’s no longer of use or in need of an upgrade that can be sold and eliminate clutter at the same time.
Know your vendor timeframes inside out – Be eagle eyed when it comes to payment timeframes and deadlines for your different vendors. That way, not only will you ensure you don’t miss any payment deadlines but you’ll also keep the cash in your account as long as possible.
Ensure smooth payment process –Using a business credit card that enables you enables you to boost your cash flow through deferred payments terms and earn rewards on business spend, such as the American Express Gold Business Card*, means you can make your money go further.
Don’t delay on invoicing – When work has been completed on a project it can be easy to switch off and turn to more pressing tasks. The longer you take to invoice, the more time you’ll have to wait for a payment to be processed and for cash to arrive in your account. Issue an invoice as soon as work is done every time to cut out any unnecessary payment delays.