Maintaining a healthy cash flow is "one of the stumbling blocks that small businesses struggle with", says one expert.
John De Groot, director of StartUpCo said: "It is because of a number of factors, ranging from the challenge they have in managing their debtors on the one hand, through to actually keeping track of their cash."
He said this last point was a particular problem as it was something that many start-up businesses failed to do.
Mr De Groot also said that SMEs faced a challenge when it came to getting clients to pay their bills, with some worrying too much about losing customers if they are perceived as pushing too hard.
He said: "The thought of losing customers sometime outweighs the real value of that customer in terms of their ability to maintain a cash flow."
Bized.co.uk says that lack of cash flow "is one of the single most important reasons why many businesses fail - regardless of how good the business is."
