Small businesses reveal financial management concerns
Nearly six in ten small business owners have revealed that financial management is their biggest concern, according to new research.
Data from Reckon found that 59% of owners have such concerns, which highlights the need for a solid understanding of financial literacy.
The study also suggested that more advice and support services are needed for smaller firms in order to ensure they are managed effectively.
The issues are of paramount importance at financial year end, especially as many small business owners can lack the knowledge of accountancy and financial practices that is required.
From a financial management perspective, small business owners should have a clear idea of what direction they see their business going in.
By having financial goals, budgets and profit and loss forecasts, it is possible to effectively manage cashflow and have the necessary finances to cover any unforeseen expenditure.
This reduces the need for insolvency measures or any other financial services as the levels of risk can be managed.
Good record keeping is also an essential aspect of a well-managed business, as it provides details of what, when and where finances are used.
Tracking expenses provides an element of control too, as business owners can ensure money is not being spent unnecessarily or even being fraudulently removed from the business – those suspecting the latter may consider forensic accounting procedures to uncover such activity.
Any business that is facing financial difficulty may want to consider professional help from accounting services or even from corporate recovery practitioners, depending on their business situation.
Although seeking these services may be costly, they can provide much-needed assistance to ensure a business runs smoothly, or that it has the necessary solutions to overcome its troubles.
The key with any financial problems is to act quickly, as it provides the best chance of finding a way to overcome the issues being faced.
By Phil Smith