UK small and medium sized businesses (SMEs) could be losing up to £3.7 billion as a result of poor internal systems and financial accounting, according to a survey by Exact.
In some cases, SMEs are failing to invoice for goods and services worth more than £10,000.
The nationwide survey found that:
- One in five SMEs admit to having forgotten to invoice for goods or services at least once
- 12 per cent of these were for jobs and services worth between £5,000 and £10,000
- Six per cent were for jobs and services more than £10,000.
- Worries about finances, such as cash flow issues and debtors, closely follows attracting new business as the biggest cause of stress for SMEs, with a quarter of business owners admitting they do not feel in control of their accounts and business finances.
This appears to be having a wider impact on the running of the business and those further down the supply chain: nearly half (45 per cent) of SMEs have had to defer payments due to cash flow problems including failing to pay their staff on time.
Hartmut Wagner, managing director of Exact, said that many SMEs who are eager to grow may not be ‘doing themselves any favours’ because of poor cash flow management.
The survey confirmed that SMEs are turning to accountants as trusted business and financial advisers, with more than half (54 per cent) of SMEs trusting their accountant more than their own business partners (37 per cent).
We live in an entrepreneurial age, with the UK very much at the forefront of the trend,” Wagner continued. “As our survey shows, the roles of accountants and financial support professionals are evolving and presenting new opportunities for them and their clients.