But It Can’t All Be Due To The DownturnIn a recent study by Entrepreneur.com, they found that the reason why US small businesses fail was:
So How Can These Issues Be Addressed?A critical discipline that must be adopted is having a sound credit management system. Business can’t fail through a lack of profits but they can through a lack of cash. This is made far easier by having a computerised accounting system and instead of waiting until the debt is overdue to find out that there is a problem, implement a system whereby you invoice as soon as possible and remind, remind, remind until you are paid. A computerised system can not only provide you with the minimum financial information you legally require, it can also provide useful management data that will make running your business far easier. It can help you forecast by providing trends, margins and plan, whilst giving you useful information to aid your decision making. In a CIMA study 54% of businesses stated that their accountant failed to assist with the strategic development of the business, a management accounting system can. We cannot leave it to factors outside our control to determine the future of our business; the main driver must be the owners/directors. If you identify a weakness, take immediate steps to resolve the situation before it’s too late.