Less than half (39%) of UK accountants believe their clients understand their finances while more than half (51%) believe SMEs do not feel in control of their financial affairs.
ABN AMRO Commercial Finance performed the research among around 200 accountants in November of this year.
Out of control
Accountants believe that SMEs are struggling to understand and manage their finances.
Almost half (48%) of accountants say clients find their finances complicated and confusing while two fifths (40%) say SMEs are burying their heads in the sand when it comes to fiscal affairs.
More than half (58%) of accountants say clients do not take the time to understand their options and almost two thirds (64%) say that many of their clients do not spend enough time dedicated to financial management.
On average, accountants report that only 15% of clients proactively discuss their finances with them on a weekly basis. More than a third (41%) only do so once or twice a year.
Instead, more than half (59%) say businesses are often responding with knee-jerk, short term reactions, rather than planning ahead.
Peter Ewen, Managing Director at ABN AMRO Commercial Finance, comments: “In this difficult economic climate, many SMEs have replaced financial management with a ‘batten down the hatches’ mentality and are failing to focus on finance just when it matters the most.
“Despite the challenges of the last few years, business owners cannot afford to lose control. They must look to educate themselves and plan ahead or risk being overtaken by the competition.”
Knowledge is power
Accountants also suggest that SMEs continue to use traditional bank overdrafts as a primary source of funding.
In fact, accountants say that, on average, 61% of their clients have a traditional business overdraft and more than half (52%) prefer to use their personal bank rather than shopping around.
Yet, a significant number (43%) of accountants believe their clients are using the wrong type of funding.
Peter Ewen, Managing Director at ABN AMRO Commercial Finance, comments: “Businesses must now plan for the long-term and look beyond their overdrafts at the full range of support and funding available to them.
“In this uncertain financial climate, business owners need to take a firm hold of their finances and seek out more reliable funding, giving them a stable foundation and the confidence to make the most of the inevitable upturn.”
For further information or an interview with Peter Ewen, please contact:
Xenia Kingsley or Lauren Greatorex at Man Bites Dog
0844 561 1416
About the ABN AMRO Commercial Finance study
The online survey was conducted amongst 182 accountants in November 2012.
About ABN AMRO Commercial Finance PLC
ABN AMRO Commercial Finance is an award-winning Invoice and Asset Based Lender and part of the ABN AMRO Commercial Finance Group. Established in 1989, the company provides Factoring, Invoice Discounting, Export Finance, Structured Finance, Asset Based Lending and numerous related services to start-ups through to £500m turnover organisations. Providing consistent support via its 200+ staff and 11 regional offices, ABN AMRO Commercial Finance helps clients manage working capital, refinance, restructure, fund business opportunities and expansion, purchase new equipment and finance M&As.