Running a small or medium-sized business is a challenge that requires grit, determination and 100% dedication.
Entrepreneurs tend to have many of these positive qualities, but the truth is that sometimes this unwavering dedication can have a negative side. In short, it can actually cost a business dear when company owners overload themselves rather than relinquish control over certain aspects of day-to-day operations.
The temptation is to keep everything in-house, whether in an effort to cut costs or due to concerns about sharing confidential information. Unfortunately, this approach often leads to staff members being asked to carry out tasks they do not have the necessary qualifications to tackle.
A recent report by the Association of Accounting Technicians (AAT) found that poor financial management costs small businesses around £15,000 a year.
Research from an expert panel of AAT licensed accountants revealed that four in five SMEs have someone who is not in a qualified financial role managing their financial processes, resulting in potential average losses of around £15,000 a year. Key mistakes included failure to make a financial plan, misunderstanding cash flow, missing key tax and VAT deadlines, and not setting aside capital to pay tax.
During our many years of working with clients, from start-ups to well-established larger companies, we have to agree that this scenario is familiar. The average start-up takes two years to call in professional help, and by then it’s likely that they will already be experiencing the effects of poor financial management.
Need help? What are your options?
If bookkeeping and payroll tasks are crowding out your working day and stopping you from focusing on your true areas of expertise, consider these three options:
- Upskill. Just because you don’t currently have the financial management skills in-house, that doesn’t mean to say that you as the boss – or another member of staff – cannot learn them. It’s possible to sharpen your expertise with the help of training manuals, college courses and e-learning. Upskilling is time-consuming, however, and the investment may prove to be wasted if a staff member moves on.
- Appoint a dedicated financial team. If budget allows, an in-house financial director and administrator will of course provide the answer to many accounting, bookkeeping and payroll issues. However, most SMEs cannot justify the expense of this. It’s a Catch-22 situation – poor financial management can stunt growth, making it even harder to pay for the staff who might be able to help!
- Outsource to an external bookkeeper. When you outsource to a firm of dedicated bookkeepers such as AMR, you have all the benefits of expert knowledge, minus the burden of commitment that comes with upskilling or recruiting new employees.
Call in the experts
There are times when it pays to have professional support. Our team can take on any project to help you with bookkeeping and payroll requirements. Our wide range of services will lead to long-term cost savings, freeing up your time to concentrate on winning business, developing client relationships, and laying the foundations for future success.
To find out more, don’t hesitate to get in touch to arrange a no-obligation meeting with a member of our friendly team.
