A recent survey by Business Link found many smaller businesses wanting when it comes to the fundamentals of good financial management.
For example, nearly a third were found to lack effective cash flow management procedures, and almost a half lacked efficient systems to chase unpaid invoices.
Perhaps even more telling were the findings that 46 percent do not know what their break-even point is and 49 per cent do not know their gross profit margin!
It is always important for businesses to be on top of their cashflow and to know what their profit indicators are saying, but in the present economic climate failure to do so could be catastrophic.
In our experience businesses owners fail to put adequate financial management procedures in place either because they are too busy with the day-to-day work of running the business or because they are reluctant to make the modest investment needed.
But this reveals misguided priorities. Too many otherwise promising businesses have gone to the wall because of poor financial management.
It doesn’t take much to be on top of your game when it comes to good financial management – but taking your eye of the ball can be fatal.
If you think you need to improve your financial management, act now; don’t wait until it is too late.
Tags: Credit Control, SME
