UK small and medium-sized enterprises (SMEs) are struggling to keep on top of their bookkeeping and compliance burdens, new research from the Association of Accounting Technicians (AAT) suggests.
According to the AAT’s study, as many as 80 per cent of UK SMEs are relying on unqualified and uninformed staff to manage their business’ financial information and accounts – with the average SME losing approximately £15,000 a year as a result.
Following the publication of the findings, the AAT is urging businesses far and wide to either “engage external accountants” or invest in “upskilling” their existing staff.
The survey reveals that the average SME only seeks specialist advice from an external accountant once every two years and that SMEs are missing out on potential cost savings and growth opportunities as a result.
In order to achieve “sustainable growth,” businesses need to “make use of financial skills as early as possible,” the AAT says.
Adam Harper, Director of Strategy at the AAT, said that effective financial planning was critical for SMEs, as unforeseen crises can easily arise.
“There are a number of simple things every business can do to avoid some of the most common financial pitfalls,” he said, setting out a five-point checklist for sustainable SME growth.
The ATT has said that businesses should consider the following:
- Setting up a reserve bank or ‘rainy day’ fund.
- Spending strategically on marketing and growth-related activities.
- Keeping note of key tax dates on their calendars.
- Upskilling existing staff.
- Ring-fencing a percentage of income to pay for tax and VAT.