The UK"s small and medium-sized enterprises (SMEs) risk losing out on an estimated £3.7bn through failing to invoice for work, according to a survey from business and finance software provider Exact. report Harris & Co chartered accountants.
It found that one in five (20%) of SMEs admit to having forgotten to invoice for goods or services at least once.
While in 50% of cases the amount involved was under £1000, 12% of respondents said they had not invoiced for a job worth between £5,000 and £10,000, and 6% for more than £10,000.
Exact says the implication for the UK"s 4.8 million SMEs is that they are collectively out of pocket by as much as £3.7bn.
The survey shows the biggest cause of stress for SMEs is fighting for new business (31%), closely followed by worries over finances (23%), such as cashflow issues, debtors and business planning.
Nearly half (45%) said that they have had to defer payments of one kind or another due to cashflow problems, including failing to pay suppliers (27%) or staff wages on time (12%).
One-quarter (25%) of business owners and leaders admit that they do not feel fully in control of their accounts and business finances.
Mukesh Shah, head of outsourcing at accountancy firm HW Fisher & Company, said: ‘Being fully in control of your finances is clearly vital to better business decision making. The findings of the Exact research seem to suggest that there is a real need for better working practices and processes to be in place between accountants and their SME clients.’
The survey showed that SME owners report placing more trust in their accountant (54%) compared to anyone else, including business partners (38%), friends in similar businesses (35%) or their bank manager (18%). This view is reciprocated, with 51% of accountants saying they feel they hold some influence over their SME clients’ broader business decision making.
The majority of accountants surveyed (61%) communicate with their SME clients no more than once a month. Most (86%)identified cloud-based accounting systems as a way of improving collaboration by offering greater online visibility over clients’ financial information (46%), plus the opportunity to spot issues while they could still be resolved (44%).