A new survey has revealed that the key threats to growth for small and medium sized businesses included failure to make a financial plan, misunderstanding cash flow and not setting aside capital to pay tax.
The research from an expert panel of Association of Accounting Technicians (AAT) accountants also found that worryingly, four in five SMEs have someone who is not in a qualified financial role managing their financial processes.
This in turn has resulted in potential average losses of around £15,000 a year.
AAT have created a check list for the UK’s smaller sized businesses that aims to encourage better planning and support growth:
- Set up a reserve bank account for a ‘rainy day’.
- Ringfence a percentage of regular income to pay for tax and VAT later in the financial year.
- Spend strategically on investments that will deliver growth (e.g. marketing).
- Find your business’ ‘hidden accountant’ – e.g. upskill a member of your staff in accountancy skills. However, it is best to have an external accountant to provide vital support.