Majority of small businesses in Ireland prefer to pay electronically
Almost three quarters of Small and Medium sized Enterprises (SMEs)have prfeer to pay their creditors, according to the results of a recent survey.
74 per cent of SMEs say they have moved away from cheques in the past five years in favour of electronic payment methods, according to the most he 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:
Direct debits 31%
BACS/electronic transfer 26%
Credit or debit card 14%
Newly appointed MD of Close Brothers Commercial Finance, Ciaran McAreavey said: “Our research echoes statistics from the Irish Payment Services Organisation (IPSO), which revealed continued growth in electronic credit volumes in 2013 and the eighth successive year in which cheque numbers fell. 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, 64 per cent said it’s because of its ease of use. 18 per cent said it gives them better control of their cash flow and 18 per cent say it guarantees payment on time.”
The survey further found that 67 per cent of respondents will use online banking even more in the next five years.
Mr McAreavey 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.”