Small to medium-sized enterprises (SME) prefer cash when compared with other forms of payment, a study has found.

According to the findings of a study by Alliance & Leicester, over 40 per cent of SMEs insist upon cash in preference to other alternative methods of payment because it is easy to manage and carries no transaction costs.

The study of 471 SMEs also found that less than 40 per cent of firms are unwilling to take non-cash forms of payment.

"[Our survey] confirms that cash is still very much a central part of the day-to-day operations of [SMEs] in the UK," said Russell Carter, head of cash marketing at Alliance & Leicester Commercial Bank.

"Cash still offers significant advantages for businesses looking for easy management of financial transactions," he added.

Alliance & Leicester is a UK-based provider of financial services, offering a range of financial products, including mortgages and credit cards.