We know our customers are agile, growth-focused businesses. You love to be out there winning and delivering new business, wooing customers and bringing new products and services to market. But the sad fact is that many businesses fail because they don’t pay enough attention to outgoings. SMEs often lack the systems and processes they need to properly to manage expenditure.

Research from CB Insights revealed that running out of cash was the second most common reason businesses gave for failure – 29% of CEOs blamed insufficient funds for the collapse of their business. With figures like these, we thought it was important to investigate and see how we can help SMEs master their expenditure. What visibility do they have of routine and ad-hoc expenditure? What systems and processes do they have in place and what support do they get from their banks? What more could they do?

Revolut for Business surveyed 602 owners, managers and financial directors in SME business in the UK, France and Poland in November 2019 to find out how they could better take control of their finances and master their cash flow for good.

Our key findings:

– 35% of businesses surveyed still use paper or Excel forms for expenses

– 69% of businesses surveyed reconcile all payments to a single account monthly

– 71% of businesses surveyed want faster access to funds paid into accounts

Virtual accounts for visibility and control

As noted, we found the majority of SMEs (69%) rely on a monthly reconciliation to a single bank account to manage all their payments. But, about one in five of our survey respondents use individual accounts to manage specific projects. For example, they set up dedicated accounts for tax, salaries and supplier payments. Although this provides much enhanced visibility, even among larger businesses only 30% of 51-100 person businesses and 24% of those with 101-250 employees manage multiple accounts in this way.

Virtual accounts, used by around 10% of the sample, provide the most flexible solution. They allow dedicated accounts to be created instantly but still managed through a common dashboard. They provide visibility across all your finances, but let you manage, budget and forecast for specific projects separately.

Larger SMEs (101-250 employees) are most likely to use these (22%) although smaller businesses that lack dedicated finance teams may find this approach most useful; only 3.5% of those with under 25 staff are currently doing so.

Our research highlights a further issue impacting cash-flow. Seventy-one per cent of SMEs would like to be able to spend received funds as soon as they are in their accounts, but one in six complain that their bank is too slow in clearing them. Of these 37% in the UK are made to wait between 36 hours and three days before they can use funds in their accounts.

For fast moving businesses and at busy times, this creates a very narrow window in which payments can be made to avoid the additional interest charges, holds on stock deliveries, and damage to credit facilities and business reputation than can result from missed payments.

Our quickstart guide

Keep your cash flowing and your finances healthy with these simple steps:

– Create an expenses policy (and stick to it) – Establish clear and enforceable routines for claiming expenses

– Issue employees with payment cards – Establish dedicated expenses budgets. Track expenses in real time

– Use expense management solutions – Integrated with your accounting software. Use dedicated apps and integrated solutions

– Organise multiple accounts and pockets – Use automated payments and specific permissions to retain control

– Keep an eye on things – Set up alerts and reminders to keep on top of outgoings

Download the full whitepaper here.

Get started with Revolut Business

Revolut Business is a borderless account built for growth. Created to give you an advantage over your time, day and the competition. With the built-in speed and ease, plus the security and transparency you rely on.

It’s designed to work for you. Powerful, personalised tools all in one place, giving you ultimate control over your business finances.

Join the 400,000 businesses already on Revolut Business. No more juggling, no more guesswork. Focus your valuable time on what’s important. Focus on what’s next.

Get started with Revolut Business today.