Ninety-three per cent of small and medium-sized businesses are unable to recover more than half their losses caused by SME fraud.

And 45pc of businesses surveyed for the latest Bottomline Technologies payments survey said they have been hit by fraud within the last 12 months.

The average financial loss caused by fraud sits at £240,092, with the majority of fraud losses anything between £50,000 and £250,000.

Nearly half (47pc) of businesses only ever recover 20pc of their losses.

Cyber-fraud gives finance directors and accounts staff the most concern, with 78pc of respondents to Bottomline saying they are concerned “a fair amount” or “a great deal” about an external cyber attack impacting their business.

Over two thirds of financial decision makers (68pc) are worried about being tricked into making a fraudulent payment and one in six are worried about being defrauded from inside the company.

More than half of financial decision-makers say they are unaware of new industry initiatives to prevent fraud such as Open Banking, which gives companies the same kind of access and oversight of business transactions as retail customers expect of current accounts. Only 17pc of financial staff say they are ready to embrace Open Banking.

Nigel Savory, managing director Europe of Bottomline Technologies, said: “Open Banking has the potential to free up time previously spent on back office activity. For example. small businesses can easily gain access to their different banking transactions, balances and history through trusted organisations.”

Late payment

However, 92pc of financial decision makers admitted to paying suppliers late.

Accounts payable processes taking too long was cited as the number one reason for late payments, with dispute over the quality of a supplier’s goods or services given as the second reason. More than a third (35pc) said they paid late to conserve cash flow or prioritise other payments.

Over one third of finance leaders say their businesses plan to adopt real-time payments within the next 12 months. This indicates that 90pc of companies are set to implement real-time payments by the end of 2020.

Said Savory: “Real-time payments will be especially impactful for small businesses looking to improve their cash flow and have their debts settled more quickly. Given that the technonlogy has been in place since 2008, smaller companies have begun to expect the same payment experience as they are accustomed to as consumers.”

Bottomline surveyed 400 financial decision makers in Britain for its fourth annual Business Payments Barometer.