Admin Chaos Costs SMEs Billions
Many of the UK’s small and medium sized businesses are losing money because they have failed to invoice their customers.
According to business and finance software supplier Exact, the amount lost due to sheer disorganisation could amount to a staggering £3.7 billion.
Looking at the figures from a nationwide survey commissioned by Exact, 1 in 5 (20%) SMEs admitted they had forgotten to invoice at least once.
When they looked deeper into the value of the missed invoices, around 1 in 8 (12%) of small and medium-sized businesses said the jobs were worth between £5,000 and £10,000 whilst 6% of those who had failed to bill their clients were missing out on over £10,000 worth of remuneration.
The main problem with failing to bill clients was that the reduction in cash flow had a knock on effect elsewhere in the business.
When asked, 45% of the SMEs polled admitted that they had to defer payments elsewhere. In some cases, 12% of small and medium-sized business had not paid their staff on time.
Hartmut Wagner, the Managing Director of Cloud Solutions at Exact commented on the matter, saying:
“We don’t want to blow this issue out of proportion 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 whole point of the survey was to gauge the relationships between SMEs and their accountants.
The results concluded that SMEs’ most trusted business advisors are their accountants, with 54% of busines leaders backing up this premise.
Of the accountants questioned, 51% believed they were having an influence over their clients’ businesses.
Despite the positive trust levels between SMEs and accountants, it was found that the lines of communication were often not that strong with 61% of accountants saying they were in touch with their clients just once a month.
The reason for lower levels of involvement was put down to the fact that many small businesses still use spreadsheets whereas accountancy firms (86%) believe that cloud-based systems could benefit SMEs enormously.
Wagner added that the benefits of online collaboration was being driven by accountants’ needs for greater visibility of figures, being able to spot issues before the become a problem and being able to work on data in real time.