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Find your "hidden accountant" AAT tells SMEs

25 April 2018

Find your "hidden accountant" AAT tells SMEsFour in five small businesses have unqualified staff managing their finances, according to new research.

A study by the Association of Accounting Technicians (AAT) has found that SMEs are losing around £15,000 a year on average per year because of poor financial management.

The findings also show that most small firms only access professional support two years after starting up.

The accounting body is advising SMEs to consult expert accounting advisors; it has also suggested that business owners should identify the "hidden accountant" within their own team - the person that could most benefit from being be upskilled with accounting expertise.

Key threats to small business growth, it says, are: failure to make a financial plan, misunderstanding cashflow and not setting aside capital to pay tax.

AAT has created a five-point checklist for SMEs to encourage better financial management:

  • Set up a reserve bank account for a "rainy day" fund;
  • Ring-fence a percentage of regular income to pay for tax and VAT later in the financial year;
  • Spend strategically on investment that delivers growth, such as marketing;
  • Mark key tax dates on a calendar to plan ahead;
  • Find the "hidden accountant" in your business and give them additional training.

Adam Harper, director of strategy and professional standards at AAT, said: "Effective financial planning is critical for SMEs as they often lack the funds to manage an unexpected crisis. There are a number of simple things every business can do to avoid some of the most common financial pitfalls.

"As we are just a few weeks into the new financial year, we are advising SMEs to make use of finance skills as early as possible to help deliver sustainable growth. Businesses can engage an external accountant to provide vital support but should also consider looking for their own 'hidden accountant' - that colleague who is best placed to upskill and keep your business in good financial shape on a day-to-day basis."

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