SMES wasting huge amounts paying with cheques

Small and medium-sized contractors (SMEWs) are wasting vast sums of money by paying by cheque, according to Visa.

In a survey carried out for the credit card firm, 100% of such contractors said they use cheques as a form of payment - despite each cheque costing up to 68p.

Cash is also used more frequently than business payment cards, despite the problems of record keeping. Shockingly, 30% of contractors said they use their own personal credit card for business, regardless of potential confusion and risk.

Mark Griffin, Visa's head of market development, said: "The good news is there are definitely savings to be had within this sector. Our research shows that over 35% of SMEs in the construction sector have taken out a business loan or utilised a business overdraft facility in the past 12 months.

"Business loans are often used to solve short-term cash flow issues. This can attract substantial interest charges which may be avoided by using a business payment card with up to 45 days interest free credit."

Griffin claimed that the Visa Business Card is the fastest growing payment method of its type.