As an accountant to the trades and trade merchants for a number of years, I’ve seen my fair share of poorly managed finances. Maybe it’s that those working in the trades are too busy toiling away on the ground that there just aren’t enough hours in the day to worry about keeping numbers in order. I’m clearly not ‘in the trade’ but I do understand the industry and know the tight margins that folk have to work with.
Or, maybe it’s a case of deferred responsibility. I’ve had a client – or ten – tell me, when I’ve raised a brow at their books, that this was exactly what they were hiring me for. A fair point I guess, but you wouldn’t wait to hire in a plumber until your house was knee deep in water, you’d call one as soon as that leaky pipe first started dripping!
As I’ve had to explain time and time again, if you don’t make an effort to keep things in check from the off, then it doesn’t bode well for the future – even if you get some poor soul like me to come and sift through every invoice you’ve had since before the bread slicer was invented. The truth is that every receipt you lose, every item you forget to jot down, every record that you fail to keep, each and every sum that doesn’t tot up is damaging your business.
I was reading a new survey detailing the true costs of inexact business and retail software, poor internal systems and mismanaged finances. It confirms what I’ve been preaching for years – that SMEs, including retailers and traders, are haemorrhaging money as a result of ineffective business mismanagement systems.
The survey showed that a massive 45% of SMEs claimed that cash flow problems had forced them to defer payments in the past, while a worrying 12% of companies had even been forced to delay employee wages while cash flow issues were resolved.
One fifth of SMEs questioned revealed that they had ‘forgotten’ to invoice for goods and services rendered one or more times in the past, and 12% admitted to failing to invoice for jobs between £5,000 and £10,000. Well, what’s my advice?
All told, the costs of business mismanagement number in the billions for the country’s SMEs. There are 4.8 million SMEs in the UK, and poor internal systems could contribute to a cumulative cost of £3.7 billion between them every year.
As a bookkeeper and champion of everything tech, I truly think that the answer lies in taking out the human and sticking in a computer. Yes, I own an electric can opener, an iPhone and in the 70’s I couldn’t get enough of my Teasmaid. But hear me out on this one, because from a business perspective, technology can really help to take the weight of accounts management off your shoulders. For many, an accurate EPoS system or retail management software solution would help to solve a great deal of of the challenges that you don’t have the time, expertise, or will to tackle on your own.
There are a number of different options out there, and for the most part, you do get what you pay for. It’s best to look for a package that is tailored to your business sector specifically, otherwise you you’re unlikely to get the most out of all of the features. If you’re a trades merchant selling to other businesses, then your needs will be different to, say, a highstreet shop. Retail management software can help to get your business back in line and reduce needless expenditure in future.
The best way to go about finding the package that’s right for you is to harness the power of the internet. If a company is tech-savvy enough to have a decent web presence, then you’re probably more likely to get decent support. Also, if they’re active on social networks, then it shows they care about their client base. Also, a company is more likely to reply to a question in a timely fashion or complaint if it’s on their page for all to see. Here’s one good example of a company who’ve got their social media strategy right.
So, have I convinced you that technology is the way forwards? If so, then good luck on your endeavour. Prepare to have lots of spare time and a very happy accountant. If you’re a stickler for keeping it old school and are yet to be convinced, I’ll leave you with one last thing: just remember that business growth is, and always has been, about moving with the times and keeping up with the competition.