Tardy SMEs late and inaccurate – survey

Published on the 11/09/2013 | Written by Newsdesk


accounting

Information disconnect between businesses and their accountants results in time wasting and lost opportunities according to new research…

A recent Colmar Brunton survey of 704 firms has revealed that 43 percent of small to medium sized businesses admitted they are late with supplying information to their accountant while 39 percent confessed to unwittingly providing inaccurate information.

The prevalence of manual data entry is likely to be a significant factor which is leading to these issues, with close to half (47 percent) of SMEs still inputting data manually.  The time consuming nature of this process also places unnecessary pressures on business owners.

A significant number (65 percent) spend valuable time, when meeting their accountant, on clarifying information, while for 13 percent it is to fix mistakes they have made.

Richard Reese, BankLink general manager of operations and sponsor of the survey, says that while many SMEs have invested in technology and software to ease the bookkeeping burden many are not experiencing the full benefits. This can be due to inaccuracies with manual data entry, as well as the potential confusion created by the complexity of ‘DIY’ solutions that some are using.

“SMEs are extremely busy running their businesses and often have little time for doing the books. Yet many are wasting precious time having to clarify and resolve issues with their accountant, which could be better spent on their core business or obtaining insights to improve performance and financial understanding,” says Reese.

The research also points to a disconnection between the information businesses supply to accountants and what accountants expect to receive. As a result, the accountant may have to re-do work, which they may not necessarily be able to charge for. This also decreases the efficiency of the process.

“The research results indicate that there may be a communication problem caused by the different expectations of what information SMEs need to supply their accountant with, and by when,” he added.

The disconnection between SMEs and accountants is a view endorsed by the accounting profession.

“Timeliness is an issue for many SMEs. Due to the day-to-day demands of running their business supplying the financial information required regularly gets ignored or left to the last minute, which means time is often wasted chasing up clients for late information,”  says Sam Bassett, director at Markhams Chartered Accountants and Business Advisors.

Craig Taylor, director at Candy Gillespie Chartered Accountants, says in his experience the disconnection is because not enough attention is placed on the initial set-up phase of clients internal accounting functions.

“Owning a computer and buying some bookkeeping software doesn’t make you an accountant. The client often thinks that they are going gangbusters, doing a wonderful job of their books but garbage in, garbage out is all too often the outcome which is not ideal for the client or the accountant.”

Bassett continues, “Accountants must be proactive in talking regularly to clients on matters other than compliance, providing them with useful cash based information.”

Taylor adds, “I would encourage business owners to engage their accountants throughout the whole process from choosing the right system, to implementation and training. Spend some money up-front on advice and training to save yourself money and time in the long run.”

BankLink provide a service whereby business banking transactions are provided to accountants so they can manage their clients’ accounts on their behalf. Banklink claim over 300,000 businesses and 4,500 accounting firms are using the system across the UK, Australia and New Zealand.

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