Visa Surveys Small Businesses On Payment Card Use

The survey also found that financial planning, budgeting and meeting monthly expenses continue to be the greatest concerns for small businesses and that business payment cards are consistently considered to be a strong solution to help improve the cash-management process.

The survey of several hundred small business owners and individuals with financial authority within a small business found that the use of business credit cards increased by nearly 10 percent to 65 percent over the past year. Overall satisfaction with business credit cards as a form of payment reached 64 percent. Additionally, within the next 12 to 18 months, 30 percent of small business owners said they plan to increase their reliance on business payment cards.

Receiving and collecting payments (52 percent) is the cash-management issue that was recognized as being the most challenging for small businesses -- regardless of their size. The ability of small business owners to manage and move funds was ranked as the second most challenging issue, at 21 percent, followed by their concern with making payments (14 percent).

"These findings are in line with what we have been hearing from small business cardholders for years; good management of cash position might mean the difference between the success and demise of any small business and is, therefore, their primary concern," said Raghav Lal, senior vice president of small business products, Visa USA. "For this reason, through offering innovative, flexible and reliable payment solutions, Visa remains committed to helping small businesses streamline the payments process and achieve their goals of increasing efficiency and optimizing their cash position."

For the second consecutive year, financial planning and budgeting was noted as being the predominant financial concern for small businesses, with 53 percent of respondents agreeing this is their greatest concern. However, reconciling bills and financial reporting were significant concerns for larger(1) small businesses, with 19 percent saying that this is their greatest concern, versus just 3 percent in last year's survey.

Sluggish cash flow ranked as the largest factor driving small business owners' cash management challenges, particularly not being able to always accurately estimate the timing of payables and receivables (35 percent). Another 27 percent noted that the cash management process is labor-intensive administrative work, followed by observations of a cumbersome operational process (18 percent).

"Migrating to business payment cards helps business owners better predict the timing of payments, track the status of finances, and manage their cash position," adds Lal. "By accepting business payment cards, small businesses can also accelerate receivables by eliminating the time and costs associated with preparing and sending an invoice to a customer. In the end, instead of pushing paper all day, small business owners can now maximize their time, energy, financial resources, and passion on pursuing their business."

For those respondents who already have business credit or debit accounts, 45 percent noted that if they could, they would make all of their purchases using some type of business payment card. Benefits noted by this group included greater ease in managing and moving funds (27 percent), greater efficiency in receiving and collecting payments (30 percent), and greater efficiency in making payments/disbursing funds (28 percent).

Additionally, these small businesses see business payment cards as an effective tool for managing travel and entertainment costs (91 percent), personnel supply services (48 percent), as well as for purchasing capital equipment and raw materials (42 percent).

Respondents consistently recognized that business payment cards are a strong solution to help improve the cash-management process. Nearly 27 percent said that they see card-based payments further providing greater efficiency in receiving and collecting payments. Additionally, 25 percent found that these products offer greater ease in making payments, as well as managing and moving funds (21 percent).