TechnologyUK SMEs’ financial systems losing £3.7bn unnecessarily

UK SMEs’ financial systems losing £3.7bn unnecessarily

Inefficient financial management systems are causing UK SMEs to lose significant amounts of money

UK SMEs’ financial systems losing £3.7bn unnecessarily

POOR FINANCIAL MANAGEMENT SYSTEMS are seeing UK SMEs collectively losing billions, a survey of 450 small- and medium-sized companies has shown.

A fifth of SMEs admit to having forgotten to invoice for goods or services at least once. Of those, around 12% confess to not invoicing for a job worth between £5,000 and £10,000, while 6% admit to having forgotten to invoice for a job worth more than £10,000.

The implication for the UK’s 4.8 million SMEs – which account for 99.9% of all private sector businesses in the UK – is that they are collectively out of pocket by as much as £3.7bn.

“We don’t want to blow this issue out of proportion,” said Hartmut Wagner, managing director of online financial management software company Exact, “but these findings do highlight that many SMEs who are eager to grow are not doing themselves any favours, particularly with so many of them expressing concern over their cash-flow.”

The survey found that more than half – around 54% – of SME leaders trust their accountant more than anyone else, including their own business partners – some 38% – when it comes to broader business issues. That appears to be reciprocated by accountants, with 51% of those polled saying they feel they hold some influence over their SME clients’ broader business decision-making.

“SMEs are placing more and more faith in their accountants, not just to sort out their books but also in advising them over broader business decisions, and in a large proportion of cases that appears to be hampered by poor systems and processes,” said Mukesh Shah, head of outsourcing at accountancy firm HW Fisher & Company.

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