Small and medium sized businesses (SMEs) remain highly dependent on cheques, with 79 percent of the businesses using them to pay other organisations, a new study has found.
The research, conducted by Bacs, the business behind UK direct debits and Bacs direct debit, found that 76 percent of SME’s are still receiving payment by cheque.
Cheque clearing facilities are due to be phased out by 2018 and a number of payment providers, including CHAPS and Faster Payments, are vying for businesses use their services as a replacement.
“SMEs should consider replacing the use of cheques with automated payment methods sooner rather than later,” said Mike Hutchinson, head of marketing at Bacs.
“Automated payments offer many benefits in streamlining processes and helping cash flow, which companies can take advantage of now to help combat late payments.”
The report also found 45 percent of SMEs have experienced late payments. The average amount owed to a British SME at any one time is £32,000 up from £25,000 in December 2009. The total amount owed in late payments to British SMEs is £24.6billion up nearly £600 million on last year’s figures.