Almost half of small-business owners admit to poor financial management skills.
Forty-five percent of SMEs polled by Business Link say their systems for recouping invoices are deficient.
About the same amount (46%) don’t even know what their break-even point is, while 49% say they don’t know their gross profit margin.
Businesses with fewer than 10 employees tend to have fewer processes in place to chase late payments. Exactly half of those polled don’t have structured systems for retrieving unpaid invoices, while for larger SMEs that figure is only 28%.
Understanding where your money is, following up your unpaid debts and knowing what your profit is, are vital to keep your business in the black and heading for growth
Matthew Perkins, Business Link senior advisor
Nearly two-thirds of small businesses have a bad credit rating, according to credit referencing agency Graydon UK.
“Sound financial management should be the bread and butter of every business, especially during these tough economic times,” says Matthew Perkins, senior advisor at Business Link in London.
“As we head into the recovery period, understanding where your money is, following up your unpaid debts and knowing what your profit is, are vital to keep your business in the black and heading for growth.”
