Email a collegue.| Headline: | MYOB survey probes small business IT habits |
| Description: | Only half of the UK's small businesses are using software to manage their accounts and a similar number are not confident they are completely in control of their finances, according to software house MYOB.
The smaller the firm, the less likely it is to use accounting software, MYOB found in a survey of 400 small companies, which led it to conclude that the days of shoe-boxes stuffed with invoices and receipts are not over. Barely one in five (21%) sole traders uses accounting software, compared to 44% of companies with two to four employees and 79% of businesses with five to ten employees. Among companies with 16-20 employees, the figure rises to 91%. Most small business owners take responsibility for keeping the company accounts until they are successful enough to hire a dedicated employee. Few respondents have formal strategies in place to manage and owners often turn to their accountants for help with mundane and relatively straightforward tasks which could be handled internally, providing the right tools and practices are utilised. On average, 45% of small businesses spend between one to three hours per week doing routine financial administration; 19% spend between three to eight hours a week and 5% lose one working day each week on administration. Overall 22% of owners use their accountant to maintain accounts (22% among sole traders, increasing to 32% among 16-20 group). Among sole traders, less than half have an accountant As businesses grow, owners tend to delegate responsibility for routine accounts maintenance and those that do have an accountant rely heavily on them for basic business functions including payroll, tax and VAT returns. While larger businesses used software more and had the advantage of dedicated employees and external accountants, MYOB argues that because of their limited resources, smaller start-up businesses stand to benefit most from a software package and that the group who were doing their accounts on spreadsheets and paper were in danger of behind left behind by their IT-savvy competitors. "The results of MYOB’s survey clearly highlight that when it comes to financial management and control, a gulf exists between those business owners that approach finances as a priority and key business element and those that do not," the report concludes. "It is usually the very small business owners who let financial management slip. While this is not surprising given that they are still in the start-up stage, and generally have simpler finances to manage, it is worth taking on board the sobering fact that businesses that fail to do their books regularly or follow good accounting practices have a survival rate of 36%. This is compared to those that follow best practice in these areas who have a survival rate of 79.7%." |
| Date: | 01.07.2005 |
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