65% of SMEs say they have moved away from cheques in the past five years in favour of electronic payment methods, according to the most recent Close Brothers Business Barometer.
The quarterly survey gauges the opinion of SME owners and managers from a variety of sectors across the UK and Ireland.
Payment methods in order of popularity:
- BACS/electronic transfer – 49%
- Credit or debit card – 16%
- Direct debits – 14%
- Cheques – 13%
- Cash – 4%
David Thomson, CEO of Close Brothers Invoice Finance, said: “Our research echoes the Payments Council’s Quarterly Statistical report for March 2015, which revealed a 2.6% annual growth rate in BACS payments and an 11.6% decline in cheques cleared. This seems a welcome contrast to the uproar a few years ago when plans to scrap cheques by 2018 were in motion.
“The use of technology is ever increasing and of those that prefer to make electronic payments, 59% said it’s because of its ease of use. 21% said it gives them better control of their cash flow and 20% say it guarantees payment on time.”
The survey also found that 62% of respondents will use online banking even more in the next five years.
Thomson added: “For me, the most important point highlighted above is cash flow. It might sound like an obvious statement but it’s the lifeblood of any business and its careful management must not be underestimated.
“If company owners offer a variety of ways for their customers to pay, including electronic payments, it can mitigate reasons for late or non-payment and help avoid bad debt.”