UK SMEs clueless about their own finances

The majority of UK small businesses do not understand their finances, according to the accountants that represent them.

Less than half (39 per cent) of UK accountants believe their clients have a handle on their accounts while 51 per cent believe small and medium-sized enterprises (SMEs) do not feel in control of their financial affairs, according to the annual Credit Check report by ABN AMRO Commercial Finance.

Almost half (48 per cent) of the 200 respondents say clients find their finances complicated and confusing while two fifths (40 per cent) say SMEs are burying their heads in the sand when it comes to fiscal affairs.

Some 58 per cent of accountants say clients do not take the time to understand their options and almost two thirds (64 per cent) say that many of their clients do not spend enough time dedicated to financial management.

On average, accountants report that only 15 per cent of clients proactively discuss their finances with them on a weekly basis, with more than a third (41 per cent) only doing so once or twice a year.

Instead, 59 per cent say businesses are often responding with knee-jerk, short term reactions, rather than planning ahead.

Peter Ewen, managing director of ABM AMRO Commercial Finance says, ‘In this difficult economic climate, many SMEs have replaced financial management with a ‘batten down the hatches’ mentality and are failing to focus on finance just when it matters the most.

‘Despite the challenges of the last few years, business owners cannot afford to lose control. They must look to educate themselves and plan ahead or risk being overtaken by the competition.’

Respondents say that, on average, 61 per cent of their clients have a traditional business overdraft and more than half (52 per cent) prefer to use their personal bank rather than shopping around.

Ben Lobel

Ben Lobel

Ben Lobel was the editor of from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

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