Why can't a third of small businesses make payroll, pay bills?

By Small BusinessFOXBusiness

Small community banks are the life support to small businesses: Bruce LeVell

RNC media surrogate Bruce LeVell says that small community banks are the life support to a lot of small businesses, especially in the minority business community.

A global study by Intuit, a business and financial software company, uncovered the fact that nearly a third of small businesses are unable to either pay vendors, pay back pending loans or pay themselves or their employees.  The problem: Cash flow

Continue Reading Below

The State of Small Business Cash Flow” focused on the behaviors, attitudes and status of cash flow challenges experienced by small businesses and the self-employed.

MORE FROM FOXBUSINESS.COM

This is true despite recent tax cuts, regulatory rollbacks and other stimulus policies that have benefited small businesses.

According to the study, on average U.S. small business owners are losing $43,394 annually by foregoing a project or sales due to issues created by insufficient cash flow.

For many small businesses and self-employed workers who struggle with cash flow, the problem isn’t that they don’t have funds in the pipeline – it’s that they don’t have the funds readily available for real-time expenses.

Small business billing practices need to be looked at, Intuit said. Nearly two-thirds of small business owners report that the time it takes the money to process after receiving a payment has the largest impact on their company’s cash flow.

CLICK HERE TO GET THE FOX BUSINESS APP

Also, nearly a third of small businesses estimate it takes more than 30 days to get paid, by customers, clients, vendors or banks. During a slow month, businesses still need to cover expenses including overhead and labor costs – thus creating cash flow woes.

The State of Small Business Cash Flow was conducted by Wakefield Research in Fall 2018 and surveyed 3,000 small business owners of companies with up to 100 employees in the U.S., U.K., Australia, Canada and India.