London, 7 October 2013 – Small and medium-sized professional services businesses could be losing out on millions of pounds as a result of poor internal systems, according to an independent survey commissioned by business and finance software provider Exact.
The nationwide survey was carried out by Exact in order to get a better understanding of the working relationships and processes in place between SMEs in the professional services sector, manufacturing and wholesale & distribution sectors, and the people they regard as their most trusted business advisors, their accountants.
Among the most startling findings was that 20% of SMEs admit to having forgotten to invoice for goods or services at least once. Among these, around 13% of professional services SMEs confess to not invoicing for a job worth between £5,000 and £10,000, while 7% 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 £3.7 billion.
“We don’t want to blow this issue out of proportion,” said Hartmut Wagner, Managing Director of Cloud Solution Exact, “but these findings do highlight that many SMEs working in professional services who are eager to grow are not doing themselves any favours by letting millions of pounds worth of work go unaccounted, particularly with so many expressing concern over their cash-flow.”
The survey showed the biggest cause of stress for SMEs in professional services is fighting for new business (36%), followed by worries over finances (23%), such as cash-flow issues, debtors and business planning. One-fifth (20%) of business owners and leaders in professional services who took part in the survey admit that they don’t feel fully in control of their accounts and business finances.
The ramifications of these shortcomings by SMEs in general also appear to have a wider impact on their business with nearly half (45%) saying that they have had to defer payments of one kind or another due to cash-flow problems, including failing to pay their staff wages on time (12%).
“Being fully in control of your finances is clearly vital to better business decision making,” Mukesh Shah, Head of Outsourcing at accountancy firm HW Fisher & Company, said. “The findings of the Exact research seem to suggest that there is a real need for better working practices and processes to be in place between accountants and their SME clients, something we pride ourselves with.
“SMEs, including those in professional services, 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,” Shah added.
The survey confirmed that more than half (55%) of all professional services leaders trust their accountant more than anyone else, including their business partners (36%) or their bank managers (15%) when it comes to broader business issues. This level of trust appears to be reciprocated by accountants, with half (51%) of those polled saying they feel they hold some influence over their SME clients’ broader business decision making.
While levels of trust between SMEs and accountants seem to be high, the lines of communication don’t always appear to be good enough to support that relationship, particularly given the fast pace of business today. The vast majority of accountants (61%) communicate with their SME clients no more than once a month.
This low level of communication is partly down to the processes involved. Over one-third (35%) of professional services SMEs use Excel spreadsheets or paper records as part of their accounting processes, and only 11% are using cloud-based accounting systems – something that most accountants (86%) believe can carry huge benefits for both parties.
“The benefit cited most often by accountants for online collaboration is being able to have greater visibility of clients’ financial information [46%], followed by the opportunity to spot issues while they can still be resolved [44%] and being able to collaborate with clients on the same set of data, in real time [43%],” said Wagner. “With the right business and finance software, accountants can offer better business and finance advice and, with a fully automated system in place, ensure that any potential issues are flagged before they actually do any damage.
“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. This is a particularly exciting time to be bringing our cloud portfolio to the UK. Never has there been a greater need for the two sides to collaborate more effectively and we at Exact are going to be doing our part to support this evolution.”
Kaynak : 