Small businesses have a tough time managing money and payments, a study has found.
According to research conducted by WePay, an online payment service provider, 41 percent of businesses report having experienced cash flow challenges. Sixteen percent say they have experienced payment fraud — just in the last year.
Small Businesses Cash Flow Issues and Payment Challenges
Cash flow issues seem to have a major impact on small businesses, the report found. The majority of surveyed businesses (59 percent) said the financial impact is consequential.
What’s further troubling is that some small businesses have experienced multiple instances of customer payment fraud. In fact, 8 percent of businesses reporting payment fraud indicated they had experienced 10 or more instances. Worse yet, payment fraud and chargebacks have been found to affect all types of small businesses, both old and new.
Technology Can Solve Challenges
Cash flow and payment management problems can have serious repercussions for a small business. Luckily, there are software platforms and tools that can provide the right solutions.
Software platforms and apps such as Square, Shopify and Zoho are especially beneficial. The WePay survey shows businesses that use these tools report 15 percent lower incidence of cash flow management issues.
Small businesses that have opted for their payments online also indicate various benefits. For example, these small business owners have rarely been required to visit their bank.
“It’s disheartening to see how many, and how much, small businesses are distracted by challenges related to collecting their hard-earned money,” said Tina Hsiao, WePay’s Vice President of Risk and Chargeback Operations.
“Yet it’s also encouraging to see how software platforms with integrated payments processing are starting to fundamentally change the game.”
For the study, WePay engaged Survata, an independent research firm. Survata conducted 505 online interviews with small business owners and operators in the U.S. for the survey.
[“Source-smallbiztrends”]
