We asked SMBs their opinions on several topics that have impacted their business over the last 24 months. The results of the survey are below and outline the challenges faced by SMBs in managing cashflow through both a pandemic and the added complexities brought on by Brexit.
The impact of late payments
Late payments have always been a disruptor in the world of business. We asked SMBs if most of their clients had paid receivables early, on time or late in 2021.
- 55% said customers paid receivables on time
Those SMBs that were paid on time responded with positive comments. Stating working capital and cash flow issues were kept to a minimum. The negative impacts of the previous 18 months were appeased with a healthy injection and normalisation of cash flow. SMBs were therefore able to accurately predict future cash forecasts and plan accordingly for 2022.
One business summed up their experience as ”most customers paid on time, but several were late. This led to working capital constraints which are required to fund growth.” This shows the impact of even one late payment.
- 45% said customers paid receivables late
Those businesses that were paid late stated extreme disruption of cashflow and therefore stress. Unexpected increased costs, poor stocking finance and consequent cutbacks also had impact.
The impact of Brexit and Covid-19
Whilst there has been a positive impact from increased international sales, inevitably there has been negative effects from the uncertainty caused by Brexit and Covid-19. Those that have been prepared, viewed both as “just another market condition” from a business’s perspective. These SMBs were able to adjust their offering to be more relevant to their customers and continue to grow.
Of the two, Covid-19 has had the largest negative impact on businesses. There are still ongoing shortages of raw material, shipping costs, and delayed deliveries in Asia.
Brexit is also having an adverse impact on business, with abandoned purchases in the UK due to slowdowns in haulage, imposition of “holding” and warehousing charges. Brexit has made trading with the UK time consuming and more costly, but not to the point that businesses would consider withdrawing from the market.
Future growth and 2022 outlook
Overall, SMBs (95%) were positive in their outlook over the next 12 months. Some SMBs expect growth to double in 2022. Key indicators and drivers for growth were determined by innovation and international expansion.
Over the past 18 months, SMBs have had to be reactive to the market, and look to use the start of 2022 as time for consolidation and focus of growth. More investment will be made in employees and financial planning.
With a more positive outlook in the market, customers are starting to respond to marketing activities and making those decisions that had been slow or put on hold in the past 2 years. This is positive news for SMBs, where they are now in the position to build momentum back to maximum output and growth.
International expansion – a driver for growth
64% of respondents expect to export more in 2022 and will continue to expand internationally. The reasons given include: a huge amount of investment going into business expansion across mainland Europe and North America and a few clients have shifted focus to Asian markets, with orders to China, Taiwan, Hong Kong and Macao.
Colm Devine, Head of Business Development at Accelerated Payments said:
In summary, SMBs have faced one of the most uncertain and challenging periods in modern history as they battle on several fronts to their keep business moving forward. Many have adapted well to these challenges, but the global supply chain issues continue to cause problems that many SMBs simply cannot adapt to fully.
Despite this, SMBs continue to remain positive about the year ahead and, hopefully, a return to some level of normality. Huge challenges still remain but SMBs have become increasingly more agile and battle hardened with many seeing opportunities ahead. We plan to play our part in providing vital working capital to our new and existing client base to allow them to embrace these opportunities with confidence for the year ahead.