The UKs small to medium sized enterprises (SMEs) could be losing up to £3.7 billion as a result of poor internal systems and financial accounting, according to a recent survey by business software provider, Exact. Some SMEs admit to failing to invoice for services worth more than £10,000. The nationwide survey found that:
- 1 in 5 SMEs have forgotten to invoice for goods or services at least once.
- 12% of these were for jobs and services worth between £5,000 and £10,000.
- 6% were for jobs and services worth more than £10,000.
The results are surprising considering that worries about financial pressures such as cash flow and debtors is one of the biggest causes of stress for 23% of SMEs. This in turn is affecting other businesses in the supply chain with many deferring payments due to cash flow problems and in some cases leaving businesses unable to pay staff on time.
Hartmut Wagner, MD of Exact, said that many SMEs who are eager to grow may not be 'doing themselves and favours' because of poor cash flow management.
With a quarter of SMEs saying that they don't feel in control of their accounts and business finance, it's not surprising that businesses are turning to advice from their accountants. More than half (54%) of respondents said they trust their accountant more than their own business partners.