A quarter of SME owners struggle to keep on top of their financial admin – and a third employ an accountant to help them, and say they could not do without their services
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Thousands of small business owners have no idea how much money they have in the bank – as one in six claim they are too busy to keep up with the amounts going in and out.
A study of 500 UK SME owners found 26 percent struggle with financial admin, and 38 percent cite rising costs as their biggest challenge.
Another quarter feel that having a rough idea, but not exact figures, is fine when it comes to managing the day-to-day cash flow.
Nearly six in ten (58 percent) operate from week-to-week rather than planning for long-term sustainability.
And 29 percent don’t know where to begin in terms of advertising their business, while one in four struggle to balance growth with product quality.
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A spokesman for accounting platform Dext, which commissioned the research, said: “It’s no secret that SME owners put in long hours to keep their business thriving, but these findings demonstrate a real cry for help with financial admin that we know many businesses struggle with.
“Our research found there are a lot of gaps in business owners’ financial knowledge.
“Businesses rely on a solid cash flow to stay solvent, so it’s critical for SME owners to either get on top of this themselves – or hire people who can do it.”
Of those business owners who believe they get by week-to-week, 40 percent said it’s simply because they don’t have experience in wider planning.
More than a third would like to employ the services of an accountant or bookkeeper, with 41 percent feeling they are stretched too thin by other business demands.
As a result, 61 percent of those polled wish they had more time to strategise about their business goals with a professional.
Fortunately, despite the lack of planning, 77 percent of respondents describe their business as being “reasonably healthy” – with 27 percent of these claiming theirs is “very healthy”.
Respondents also admit they are sometimes their own worst enemy, as six in ten feel “too proud” to ask for help with their business.
But 84 percent admit they rely on the staff they employ to keep the business running effectively, according to the OnePoll.com data.
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One in three SME owners do currently employ an accountant for their business, with the same amount saying they “could not do without” their services.
It also emerged that 39 percent say their accountant keeps them in line with local tax filings – with 47 percent relying on theirs to ensure they pay the right amount of tax.
Another 26 percent lean on their accountants to spot areas where their business can save money, and a further quarter use them for fraud detection – and prevention.
The Dext spokesman added: “Our results clearly show the benefits of having a dedicated accountant or bookkeeper for a business.
“As much as they can save cash – and make sure all your incomings and outgoings are above board – they can also offer huge peace of mind.
“It’s really one of those things where once you start to use one, you wonder how you ever got by before.”
12 THINGS ACCOUNTANTS HELP SME OWNERS WITH:
- Ensure you pay the right amount of tax
- To audit your business (legally)
- Ensure you comply with local tax filings
- To help you balance your business books
- To support your business financial planning
- Help you understand business cashflow
- Help you understand the risk exposure of your business
- To provide you with tax simulation services
- Help you understand corporate governance
- Help you identify business savings
- Help you identify where you’re reliant on a customer for revenue
- To detect or prevent fraud in your accounts