Half lack confidence managing company finances
It’s fair to say that, with so many pressures to contend with, managing finances and cash flow isn’t the easiest task when it comes to running a business.
New research from accounting software company KashFlow has shown us that it’s also by no means a challenge business owners relish.
While exactly half of the sole traders and microbusinesses polled in the survey admitted to lacking confidence when it comes to managing their company’s finances – with 43% frustrated by themselves – 54% said they were constantly worried they had made a mistake when doing so.
Almost one in three also revealed they regularly feel stressed by the financial administrative burden that comes with running their company, such is the importance of keeping cash flowing, ensuring the company is profitable and completing annual tax returns.
The study aimed to gain a better understanding of the pressures the self-employed feel when managing the company’s finances, arguably the most important task there is in business.
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Less than one in seven even rated it as the thing they like the least about self-employment.
It’s little surprise, then, that one in four rely on other people to help them with managing finances, whether that’s an accountant, a broker or friends and family.
Who can blame them?
There’s an awful lot of responsibility on the shoulders of those in charge of managing finances to do it right.
A single miscalculation can make a huge difference in any given month when it comes to being able to take on and fulfil new orders, pay bills and suppliers or even staff wages.
Yet there are also those who thrive on this pressure, according to the survey.
More than two in five rated themselves as ‘really good’ and totally confident at managing finances, with 34% feeling ‘in control’.
However the full scale of this task was also underlined by the survey, with 19 million hours a month spent by 5.3 million sole traders and microbusinesses in the UK today – the equivalent of 2.5 million working days.
“It’s clear that even those who feel confident managing their accounts still find it challenging at times, and that the overwhelming majority of sole traders and small business owners would like to spend less time on it,” said Oliver Shaw, KashFlow’s CEO.
What can businesses do?
As with all aspects of business, the important thing is to focus on your own skills and surround yourself with as much knowledge and expertise as possible around the tasks you don’t enjoy or excel at.
It’s encouraging that a quarter of those surveyed revealed they rely on other people when it comes to managing finances – admirable, even, given how in control business owners like to feel.
If you’re one of the 50% who don’t feel confident or, worse still, one of the 54% who always worry about making a mistake, consider the options that are at your disposal to take this burden off your shoulders and free up your time to focus on growing the business.
Whether it’s an accountant, finance broker, part-time finance director or someone you know who does a bit of bookkeeping on the side, there is plenty of help available to businesses who are happy to accept it in all aspects of financial management, from admin to searching for new funding.
We’d like to hear your views on this. Do the results of this survey resonate with you? Please leave your comments below.