<
p>Just Cashflow explains a range of benefits that SMEs have access to with a savings account in response to shocking research that found that less than a third owned one.
Recent research conducted with polling company YouGov on behalf of Aldermore Bank found that only 31 per cent of small and medium-sized businesses have a savings account, after polling the views of over 1,000 SMEs across Britain.
It was also found that 40 per cent of SMEs with a savings account only have it for unforeseen circumstances.
Responding to the results, John Davies, Marketing Director of Just Cashflow, said: “It's not surprising that the recent survey revealed less than a third of UK businesses have a savings account. The relatively small amount of interest they can earn is often the last of a business' concerns.”
However, John commented that having a savings account can have a variety of other benefits that SMEs could be missing out on.
“Showing you have a well-managed savings account will positively impact the underwriting decision when applying for finance,” he said, adding: “It is also good discipline to stick money into a savings account for the large bills you know are coming down the track - PAYE and VAT.”
“This also serves as an early warning system because if you have to put money away for these bills and you find yourself raiding the account it is a clear warning sign that your business is starting to have cash flow problems,” he said.
“If a business has spare cash to invest in a savings account they should think about using it more profitably. Just one example, is negotiating discount terms with suppliers for paying bills early. Believe me, the money saved will far outweigh any interest earned.
“The temptation to chase the highest rate of interest on a savings account has another drawback. It will mean you are locking your money away for a fixed period and there could well be penalties for accessing it early.
“Cash flow problems can hit even the most successful companies, so having instant access to your savings is a price worth paying.”
John concluded: “It is the same thinking that has driven the design of Just Cashflow's flexible finance facilities - you never know when you are going to hit a bump in the road and are going to need cash.”
Just Cashflow explains a range of benefits that SMEs have access to with a savings account in response to shocking research….
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