October 11, 2013
A staggering 20% of small businesses have "forgotten" to invoice for goods or services at least once. And poor internal processes could mean that the UK's SMEs as a whole are losing out on £3.7 billion.
These are the findings of a new survey commissioned by business software supplier Exact. One in five SMEs admitted to having forgotten to invoice for goods or services at least once. Of these, 12% confessed to not invoicing for a job worth between £5,000 and £10,000 and 6% admit to having forgotten to invoice for a job worth more than £10,000.
The results suggest that the UK's 4.8 million SMEs – which account for 99.9% of all private sector businesses in the UK – could be collectively out of pocket by as much as £3.7 billion.
"We don't want to blow this issue out of proportion," said Hartmut Wagner, managing director of Exact, "but these findings do highlight that many SMEs who are eager to grow are not doing themselves any favours, particularly with so many of them expressing concern over their cash flow."
Poor processes are often to blame, says the report. 25% of business owners admit that they don't feel fully in control of their accounts and business finances, and one-third still use Excel spreadsheets or paper records as part of their accounting processes.
Just 14% are using cloud-based systems that their accountants could easily access – even though 86% of accountants believe cloud-based systems offer huge benefits for both parties. And while there's a high level of trust between businesses and their accountants – 54% of SME leaders trust their accountant more than anyone else – the report finds that there's not enough regular communication.