According to Hartmut Wagner, MD of Cloud Solutions Exact, ‘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.’ He was referring to the results of an online survey, commissioned by Exact from Atomik Research, of 450 UK SMEs. It found that many of these companies were losing out big time through poor internal systems and procedures.
Staggering Loss Potential
About a quarter of respondents did not feel completely in control of their business finances. Some even said that they had omitted to send out invoices. If the potential losses were replicated across the 4.8 million SMEs noted in the Business Population Estimates for the UK and Regions 2012 report of the Department for Business Innovation & Skills, they could add up to over £3.7 billion.
With concerns over cash flow and business finance being the second biggest stress factor for entrepreneurs, the first being getting enough business, losing out on revenue because of poor invoicing procedure is the last thing they need.
Use Financial Support Professionals Wisely
The survey also looked at the relationship between the companies and their accountants who, it was reported, were the most trusted business advisers. But in the nature of the relationships, communication between them was irregular and sporadic, therefore best use of their professional skills was not being made.
If you have outsourced bookkeepers, they are not likely to allow you to forget to send an invoice, as long as they know about the service or product that has been supplied. An objective viewpoint is often useful when you are so involved that it’s not easy to see the wood for the trees. When you have a good working relationship with your bookkeepers and are in regular communication with them, they can also point out inadequate procedures and potential problems, and help to prevent them.
Good Communication Brings Rewards
The best bookkeepers can often save you the expense of involving your accountant, but will also know when that kind of professional expertise is essential. They will often have come across similar issues and difficulties to yours among other clients, and seen how they have been solved. You can benefit from their experience as long as you allow free communication and are prepared to accept their straightforward and down to earth advice. Make sure you stay in control of your business finances by discussing your systems and procedures with your outsourced bookkeepers and using them wisely.