As announced during QuickBooks Connect Toronto, Intuit has released the results and key findings from its small business cash flow report in Canada, including the statistic that nearly two in three Canadian small businesses have had cash flow issues.
“Despite anticipated hardships, these small businesses and self-employed entrepreneurs inspire us every day because they’re changing the world,” said the report. “They create the products and experiences that we all love. To shine a light on the attitudes and behaviors of small business owners and the self-employed, Intuit commissioned a global survey to unpack the state of small business cash flow.”
The online survey was conducted by Wakefield Research among 500 small business owners at companies with zero to 100 employees between October 5 and October 19, 2018.
The survey revealed that 67 percent of small business owners in Canada have been kept up at night by concerns about cash flow, even if their company has never experienced issues with cash flow.
“Many small companies are operating on margins so thin that frequent lost opportunities will put them on the path to being out of business. On average, small business owners in Canada are losing $28,885 by foregoing a project or sales specifically due to issues created by insufficient cash flow,” stated the report. Also, among those small business owners who have had cash flow issues, nearly one-third have been unable to either pay vendors, pay loans, or pay themselves or employees.
When it comes to managing payments and finding solutions, Intuit recommends that Canadian small businesses look at their billing practices (noting that 65 percent of Canadian small businesses bill their customers for goods/services on a specific date, as compared to 35 percent that utilize advanced payment) and that companies “meticulously keep tabs on the schedule of incoming revenue.”
You can read the rest of the report’s findings and methodology here.
