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In 2018, the universe is a very different place than it was just a year ago. Variation swept across the world, majority movements augmented, and trade settlements were annulled. And commodity, currency and asset prices oscillated unpredictably and the probability for major policy shifts flustered markets. At the same time, technology continues to disrupt whole businesses, raising future apprehensions about employment, productivity, and global growth. A vigorous economy demands a balance of small as well as large firms. In innovative economies, Small and Medium sized Enterprises (SMEs) typically generate more than half of GDP. They regularly produce fresh ideas and innovation by consistent bookkeeping and fresh approaches to old ideas. Start-ups, though, represent just a small proportion of SMEs. In fact, numerous SMEs are long-established family businesses or are managed by the founder and owners to attain personal objectives beyond stockholder return. Small companies—not big businesses—are the largest employers in most countries and their prominence is expected to increase as automation remains to threaten routine occupations and countries fight to accomplish full employment.

The World According to SMEs

Because of their smaller size, SMEs are naturally more susceptible to improbability than larger, more recognized firms. So it’s no astonishment that financial uncertainty (37%) and political uncertainty (15%) signify the top apprehensions for SMEs worldwide.

SME Strategies for Success

SMEs are reacting to insecurity by emerging effective strategies that build their economical strengths. They are also evolving policies and bookkeeping techniques to build from this strength and expand into new local and export advertises.

Strategies to Form Economical Strength

SMEs are prioritizing four parts critical for future achievement:

 ■ Applying technology

 ■ Agility

 ■ Augmented innovation

 ■ Appealing and retentive talent

While large businesses also focus on these stratagems, SMEs hold distinctive advantages in each of these areas which they can exploit to toughen their market position. SMEs are already assured in their competences in these four areas and plan further improvement in the coming years.

Planning

Research your opponents and your marketplace but try to think about the market as physical people. Develop a detailed understanding of the people you want to trade with and the problems they face. E-Consultancy is a fantastic source for advertising data, such as reports on how different customers act online, meaning you can direct your publicizing efforts in the accurate areas.

Set Aims

This isn’t a limited-edition job. Set purposes for every bit of advertising you do and give very specific timings and measurements of success. For example, your website’s success may be measured by how it produces inquiries or sales. Give your published work specific goals, too, such as driving traffic to your website through a specific “search for” call to action. Don’t be shy about speedily evaluating through bookkeeping and adjusting things in order to keep on track for your aims.

Get to know some local suppliers

Local industries might be able to service you much better. And they’ll always know other people who can help you, too. Don’t be scared of inquiring penetrating questions about their facilities either. You need to know that you’re spending money with trustworthy companies that can verify their outcomes, quality and delivery times. Consider your expenses cautiously and map each bit of money spent to a specific consequence.

 Become a professional

Social interacting is perfect for launching yourself as an expert in your arena. Give high value content and instruction away to help your ascension to “expert” status. Generate a policy for releasing content and set up a blog as a medium for this release.

Conclusion

Overall, remember that advertising is one of the more fun features of running a business – eventually it’s about telling individuals how great your business is – but don’t try to do everything at once. The best methods to recover return on strategy are to start where you are and gain assurance in the procedure. If the method needs modification, then add as needed.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Plus and minus sign and icon business benefit cost balance concept 3d illustration.
Among the most crucial concerns of an SME, cash flow management is a major one. An SME is a small or medium sized organization which employs people less than 250 who tend to produce a revenue of less than 20 Million Euro. Such enterprises have to face a number of strategic and tactical challenges which cover up the cloud of cunning challenges. It faces challenges in terms of technology, communication, finances, human resource and marketing. Such enterprises also focus upon the marketing challenges as well.  Following are the certain steps which can be implemented in order to conquer issues related to cash flow management:

Cash Flow Measurements Should be Made Accurately

Cash flow management is an overwhelming and hectic task, therefore it is necessary to focus on how to overcome cash debts. Cash flow must be recorded accurately through several available bookkeeping softwares such as GnuCash or QuickBooks. These greatly aid in scheduling the return dates of the cash flows and, in alarming scenarios when the returning time of cash is near, provides a great support to small business owners. Larger investments are made in order to drive larger profits which ultimately allows an enterprise to flourish. Therefore, measurements are important to overcome issues encountered with cash flow management.

Improvement of Awaiting Payments

An enterprise must try to return their cash flows rapidly. Following are certain techniques which can be used to clear all payments:

  1. Discount to customers may be offered in reward to their efficiency in paying their bills.
  2. At the time of order placement, customers must be asked to make payments.
  3. Customers unable to pay cash can use a check or credit card to pay their bills.
  4. Update your inventory system in order to improve payment methods to make larger payments easily.
  5. Transactions must be clearly observed and tracked through issuing invoices regularly and by using bookkeeping softwares. This would help at the time of returning cash flows.
  6. COD is an efficient tool which refers to cash on delivery in order to overlook payment delay which would further help out an enterprise in clearing its debts.

 

Not Enough Total Margins

 Economists talk about the supply and demand of goods and services. They portray certain rules and regulations for efficient supply and demand of goods and services for the exact determination of price. Similar rules apply to SMEs who face cash flow problems due to wrong determination of prices when they sell goods and services for a low price ultimately falling into debt. Companies must strive for an appropriate determination of prices to avoid cash flow discrepancies.

 

Conclusion

SMEs are enterprises which deal with having fewer employees which generate lesser revenues. This ultimately leads a company to take debts from other companies resulting into cash flow problems. When a company spends more than its earnings, it results in debt which then must be returned through appropriate scheduling of cash returns. Using bookkeeping software and/or hiring a bookkeeping service will aid in properly recording all transactions and, ultimately, lead a company to success.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

medical cost, stethoscope on dollar banknote money. concept of health care costs, finance, health insurance fund.
Small and Medium Enterprises (SME) have grown much in the last ten years due to growing development opportunities, embracing of the latest trends, and novel machinery. But, at the same time, an SME has to face many challenges due to credit instruments access or monetary support.

Cash flow management is an ongoing and persistent fight which business owners have to fight to avoid failure.

Statistic Brain, in their study in Jan 2014, revealed that the major causes of failure of small and medium businesses is cash related. These cash flow crunches are caused due to lack of pricing knowledge, no planning, lack of financing knowledge, lack of bookkeeping experience, bad practices of credit granting, insufficient borrowing practices, and insufficient inventory.

Acquire a Hold on Cash Flow

All of these pitfalls relate specifically to cash flow. Cash flow isn’t a difficult business topic, however many small-business owners don’t want to deal with it because they think it’s “all about numbers.” But, it isn’t. It’s about the health of your business.

You need to follow two primary ways to improve the cash flow in your business.

  • Income: Increase the amount of cash coming in.
  • Expenses: Decrease the amount of cash going out.

Sounds like such an easy concept, doesn’t it? Here are some easy and amazing practices for maintaining a smooth cash flow:

1. Calculation of business risk analysis and advance planning

Always keep an eye out for unexpected serious challenges and a variety of risk factors involved with running a successful business. All kinds of “what if” scenarios should be considered for risk analysis. These, in turn, become a part of your bookkeeping process of budgeting and maintaining a healthy cash-flow.

Use a spreadsheet or bookkeeping software to enter cash inflows. Simply reflect a hypothetical situation by adding or deleting inflows.

2. Make a new business bank account

The first and foremost step required for a start-up business is to have a separate bank account. Mixing your personal account will cause confusion and make the bookkeeping of the business budget troublesome.

3. Efficient monitoring of inventory

Manage inventory efficiently. Maintain a sufficient inventory of fast-moving items. Do not overstock. Avoid keeping stock of dead or slow-moving items. Analyze the items which are selling and which are not. Keep the inventory levels lean so that your working capital isn’t tied-up unproductively and unprofitable.

4. Always maintain Buffer Money

Always keep at least three months money saved in the bank for a rainy day so that you always have funds on hand to finance your business.

5. Control Cash Flow best by bookkeeping

Many business owners postpone invoicing customers and make payments at the end of the month. Keep track of your transactions on how to pay the supplier and money owed by the customer by bookkeeping. Either implement accounting software or use a simple spreadsheet.

6. Cut expenses, manage Cash outflows

Control and lessen your expenses even if you are gaining profits. Keep records by bookkeeping. Control cash flow and prevent from overflowing. The outflow of cash will destroy your business.

7. Grow cash

Maintain your currency balances in accounts that earn interest. Keep cash in accounts which pay interest at a higher rate. Stay away from long-term deposit certificates because, by doing this, you will be bound for a certain time period. Invest in certificates which are penalty free or funds which you will not need soon.

 8. Focusing on cash flow, not on profit

Agnes Cserahti has estimated that 90% of SMEs never plan their cash flow though they have profit forecasts of many years. This is one of the major reasons for failure in the early stage of business. New businesses should work with clients who are reliable and who pay quickly.

Conclusion

Small business owners that work on good cash management always have a profitable business as they have a lower debt and/or loan rate. This also leads business owners to be flexible and avail new opportunities with a sound peace of mind.

Check out America's Best Bookkeepers

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Hand drawing a red line for sales growth on a graph displayed on a blackboard.
Positive cash flow is the lifeline of SMEs (small and medium enterprises). It is vital to supporting and raising a business. Cash flow is not just bookkeeping the amount of money coming in and going out of a business. SMEs can save money by adopting the strategic approach to control cash flow. From the bookkeeping, this saved money can be invested in new markets and products. Loans can be paid off by controlling cash flow. SMEs will be in a much stronger situation with positive cash flow and can easily attract financiers and lenders with attractive funding conditions and at greater discount rates.

 Steps to Positive Cash Flow

1. Targets for Cash Flow

Set targets for positive cash flow. Generate a forecast and update it on a weekly basis to have better control over cash flow.  Andrew Jhonson, a financial advisor, states that controlling the creditors setting is important for the attention, satisfaction level, and ownership to succeed and rise. Bookkeeping of incoming and outgoing cash should be implemented to have better control.

2. Payment Terms are Clear

It is crucial for controlling cash flow to have clear terms for payment. This determines when and how will you be paid without delay. The CEO at the National Specialist Construction Council, Suzanne Nichol, pointed out that if the company doesn’t keep record of overdue payment, they will not be able to manage the cash flow.

3. Invoice Promptly

Pay invoices promptly to have positive cash flow in SMEs. Marion Thomson advised to clear invoices as soon as possible. Sending invoices through emails is a more efficient way as it is delivered quickly and it’s automatically recorded in the sent mails. Bookkeeping will help you to have a look at all of the transaction history.

4.   Easy Payments for Customers

Payment schedules should facilitate the customer as much as possible. Thomson advises. “Try to avoid being paid by check as it will result in delay before the money arrives in your bank account,” she says. “Online payments are a much better option.”

5.   Offer Clients Payment Packages at Fixed Rates

To ensure positive and stronger cash flow in SMEs, offer payment packages at fixed alerts and at periodic intervals.

6.   Establish Payment Schedules to Minimize Debtor Days

Many SMEs practice a long duration of payment and invoicing. This should be minimized to manage cash flow effectively.

7.    Manage Cash Flow by Utilizing Technology

Cash flow management becomes quite easy if we use technology. Many accounting softwares have been developed and adopted by entrepreneurs who have limited time for management.

8.   Focusing on Cash Flow Rather than on Profit

If your cash flow is in order, your profit will be in order. “A lot of new businesses do not make it past six months. They might have been a profitable business eventually, but they need to have a good cash flow to survive” Agnes Cserahti says. She estimated that 90% of SMEs never planned for cash flow, though they have profit forecasts of many years. This is one of the major reasons for failure in an early stage of business.

New business should work with clients who are reliable and who pay quickly.

9.   Training Employees Regarding Cash Flow Monitoring

Few SME’s, for example, Manchester-based Ratio Law LLP, assign a devoted individual to follow the money coming in and going out. Training of staff regarding positive cash flow management and bookkeeping should be scheduled to get optimum benefits.

10.  Keep Bank Informed

Your bank can suggest business helpful services. For example: overdrafts and credit, mainly when they are starting out. So you must be well aware of these services.

Conclusion

Having clear payment terms and invoicing through emails are two of the important steps mentioned above to create a positive cash flow. Following all of these points will ensure your success as an SME.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Cash flow on black blackboard with businessman
Among the most crucial concerns of an SME, cash flow management is a major one. SME is a small or medium sized organization which employs less than 250 people who tend to produce a revenue of less than 20 Million Euro. Such enterprises have to face a number of strategic as well as tactical challenges which cover up the cloud of cunning challenges. It faces challenges in terms of technology, communication, finances, human resource and marketing. Such enterprises also focus upon the relationship of marketing as well.  Following are the certain steps which can be implemented in order to conquer issues related to cash flow management.

 

1. Cash Flow Measurement should be Accurate

Cash flow management is a large task, therefore it is necessary to take care of how to overcome cash debts. Cash flow must be recorded accurately through several available bookkeeping softwares such as QuickBooks. This helps in scheduling the return dates of the cash flows. This also aids entrepreneurs in alarming scenarios when the returning time of cash is near. Larger investments are made in order to drive larger profits which ultimately flourishes an enterprise. Therefore, cash flow measurements are important to overcome issues encountered with cash flow management.

 

2. Improvement of Awaiting Payments

An enterprise must try to return their cash flows rapidly. The following are certain techniques which can be used to clear all payments:

1.  Discount to customers must be offered in reward to their efficiency in paying their bills.

2. 
At the time of order placement, customers must be asked to make payments.

3.  Customers unable to pay cash can use checks or credit cards to pay their bills.

4.  Keep updating your inventory system in order to improve payment methods to make larger payments easily.

5.  Transactions must be clearly observed and tracked through issuing invoices regularly and bookkeeping software.

6.  O.D is an efficient tool which refers to the cash on delivery in order to overlook payment delay.

 

3. Not Enough Total Margins

Economists talk about the supply and demand of goods and services and portray certain rules and regulations for efficient supply and demand of goods and services for the exact determination of price. A similar rule goes for SMEs who face cash flows due to wrong determination of prices where they sell goods and services for a low price ultimately falling into debts. Companies must go for appropriate determination of prices to avoid cash flows.

 

Final Note

SMEs are enterprises which deal with having less employees which generate less revenues. This ultimately leads a company to take debts from other companies resulting into cash flows. The term is given to the state where management of cash is required when a company spends more than its earnings resulting into debts which then must be returned through appropriate scheduling of cash returns. These transactions are to be recorded through bookkeeping software.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

Young female business owner in a clothes shop, portrait
In past, the number of personnel in an enterprise determined whether the business was a small scale or a medium-sized enterprise. In today’s era, the difference between small, medium and large enterprises is determined by the number of staff working full time or part time, IT infrastructure, and the strategic managers. A giant enterprise will always have the full-time personnel for IT infrastructure and management of their data in the form of modern bookkeeping.

It is very difficult for a small or medium-sized enterprise to survive among giant corporations. Giant businesses are the major players in the market and their promotional budget is huge. As the sales of their products or services is larger, it makes their cost usually lower than the production of small and medium-sized businesses.

However, the promotional budget and low prices are not the only factors that affect the customer choices. Quality, efficient services, and the flexibility to produce quality per a customer’s demand all play a part in where a customer decides to open their wallet. Nurturing a sense of trust among its customers plays a major role in the survival of a small business.

Measures to Ensure SME Survival

If you are an investor in an SME and face competition with a larger enterprise, organized bookkeeping will allow you to assess the strengths and weaknesses of your competitor. Also,  you will be able to assess your company’s edge over your competitor. Identify the possible customer’s needs. Offer more personalized services. Show your capability to customize the product or services. Show a quick response to your customer’s needs.

  • Large companies also make the strategic alliance with smaller enterprises to be their subcontractor and, by doing so, will raise the success of both companies.
  • Small and medium enterprises are motivated by a strategic alliance with each other to provide a wider range of products and services to their customers.

How to Recuperate from a Business Slump

1.  Reinvent. Take a look at strengths, weaknesses, and open market challenges. Offer new products or services to get market share from that.

2.  
Keep your costs down even while the big corporations refuse to reduce their costs, even in a period of financial trial.

3.  Customize your products and services according to the needs of your clients and customers.

4.  Small and medium-sized enterprises often lack the marketing of their services and products.  Get creative and find a way to get your name out there, even if it’s only through social media.

5.  Reach for a direct/face to face meeting with your customers. This ensures better trust and higher quality relationships with your customers.

6.  Healthy competition and good bookkeeping will keep your business going.

7.  Get involved in social media and interact with your customers. Updates about promotions and offers attract more potential customers.

8.  Keep contact with your customers. Even if the customer stops buying your services or products, contact them. They might come back to new products or for the same old ones.

9.  Vigilantly keep an eye over your employees to keep them motivated and on track.

10.  Review your business. Identify the changes needed and assess the risks and benefits constantly.

11.  Prioritize the list of changes that are to be made in your SME. The changes that have no potential risks must be the top priority.

Conclusion

All of the above steps seem simple but can bring a huge change in your business in the long run. Small businesses can never play like giant corporations but they can have their own share of the market.

Check out America's Best Bookkeepers

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

 

 

Portrait of a young, confident manager sitting by the desk and pointing at a blackboard filled with charts behind her
In bookkeeping, the term liquidity is well-defined as the aptitude of a business to meet its financial obligations as they come due. The liquidity ratio, then, is a calculation that is used to ration a business’ ability to pay its short-term debts. There are three corporate calculations that come under the classification of liquidity ratios. The current ratio is the most substantial of the three. It is followed by the acid ratio and the cash ratio. These three ratios are often congregated together by business specialists when bidding to precisely measure the liquidity of a company. One last aspect of liquidity is specifically imperative for financiers: the liquidity of businesses that we may wish to invest in. Money is an enterprise’s lifeline. In other words, a corporation can retail a ton or products and have worthy net earnings, but if it can’t gather the actual cash from its clienteles on a timely basis, it will soon fold up, incapable to pay its own compulsions.

Small and Medium Enterprises (SME) play a reflective part in the financial improvement of many countries around the globe. But, due to an assortment of precarious complications, many SMEs are unable to contest and tolerate long enough in the market. This picture is upsetting as SMEs form an important economic constituent and are usually measured as the engine of financial growth. The importance of SMEs to the nation’s economic survival makes an argument on various issues impacting the success of SMEs highly relevant and timely.

Challenges Faced by SMEs

SMEs face encounters from increased opposition, the skill to familiarize to promptly changing marketplace demands, technological variation, and volume limitations relating to information, modernization, and creativeness. For numerous SMEs, though, their prospective is usually not completely comprehended due to elements linked to their small scale:

1.  Shortage of resources (funding, technology, experienced labor, expertise in bookkeeping, and marketplace statistics)

2.  Lack of markets of measure and scope

3.  Greater transaction costs relative to large companies

4.  Lack of systems that can subsidize to shortage of information, expertise, and capability of domestic and international marketplaces

5.  Augmented market opposition and deliberation from large multinational firms caused by worldwide integration and economic amalgamation

6.  Incapability to contend against larger organizations in terms of R&D spending and innovation (product, process, and organization)

7.  Focus to “blending” and insecurity

8. Privation of commercial zeal, capacity, and expertise

In total, several small businesses find that their geographic remoteness puts them at a competitive disadvantage. In spite of these extensive obstacles, many markets remain profoundly dependent on SMEs, chiefly for employment generation. Regardless of their supposed weaknesses, SMEs have not been swept away with the process of globalization and regional incorporation. Relatively, their part and involvement has transformed and evolved which has permitted many to persist globally, competitively, and collectively to be an essential source of employment generation.

Solutions for SMEs

Listed below are five solutions to some of the most common small-business glitches:

1.  Formulate for the alteration from full-time employee to entrepreneur by generating a step by step detailed and systematic strategy.

2.  Minimize the complications connected with being the boss by preparing for them in advance. 

3.  Preclude burnout by prioritizing R&R.

4.  Avoid financial suffering by staying well-informed of your finances-Being inexperienced or in denial about your financial condition can halt your industry. Expertise in bookkeeping is the only way to keep your company afloat.

5.  Overcome your worries of risk-taking by antagonizing them head-on. 

Conclusion

Being a small-business owner can feel like a never-ending battle. It takes strength, self-restraint, and an astonishing amount of excellent bookkeeping efforts to prosper. Possessing your own business isn’t just about accomplishing a passion, it’s about bashing down all of the unanticipated difficulties that come with the territory. SMEs have made great influences to the development of economy, although the financing difficulty of SMEs has been slightly eased with passage of time.

Check out America's Best Bookkeepers

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

CONTROL word cloud, business concept
No matter how big or small your business may be, employee theft will continue to eat a significant portion of your annual revenues and profits. It is something that has been around since the beginning of times. No one can deny the fact that businesses are vulnerable to fraud, especially SME entities who suffer excessively huge losses of fraud. SMEs need to ensure effective internal controls in order to create a favorable environment for yielding profits. Although, you may believe that cases of fraud are found in large-scale companies with thousands of employees in multiple locations. The truth is, SMEs are victimized and employees tend to steal from smaller businesses more frequently than larger organizations.

SMEs Are Vulnerable To Employee Fraud

Today, organizations have mixed opinions on how to deal with cases of fraud. Some are very proactive and instill policies for prevention; some are lenient and show more sympathy towards their employees on personal grounds. According to studies, organizations with fewer than 100 employees are more vulnerable to employee fraud as they account for the highest percentage of fraud. The thing is, SMEs are more inclined towards generating sales and profits and care less about maintaining effective internal controls and reviewing their bookkeeping records with a fine tooth comb. Each year, SMEs lose billions of dollars in annual revenues and profits worldwide, which bears testimony to the fact that employee fraud is inevitable and it hurts a business’s integrity.

Fraud Can Be Prevented

With innovative tools, techniques, and practices, fraud prevention and detection is possible. You must choose the right prevention option by making a comprehensive analysis of your business. Obviously, no one knows a business more than its owner and owners have the potential to change the fate of their company. They know their business’s strength and weaknesses and can possibly turn things around in their business’s favor. In organizational setups, SMEs have scarce resources in which they need to ensure whether everything is in control or not. Business owners need to know how to create and maintain internal controls by implementing a properly designed fraud prevention and detection plan with limited resources.

Why do Employees Steal from their Company?

There are primarily two reasons why employees get  involved in fraudulent activities in an organizational setup; when they are undervalued and underpaid. These two things work as fuel for them and, if it’s not there, the employees feel discouraged, demotivated, and left out. Moreover, you can only expect your employees to work efficiently if both of these things are ensured by the owner. When these two things aren’t there, the owners can expect their employees to be involved in fraudulent activities through various means. Organizations can catch up with their fading fate by creating, implementing, and practicing the proper internal controls.

Corruption Ruins the Business

Moral and financial corruption eats up an entire organization, slowly and gradually. Diminishing profit margins and draining profitability leads a business towards a complete disaster. Owners who are eager early on to get their organization’s operations back to normal may have a slight chance of success. But, those who react when the time has already passed achieve very little or no success at all. Some organizations choose to hire professional managers who can turn things around on their organization’s behalf. This seems like a smart choice, especially for those who are good at yielding sales and profits but lack managerial skills to maintain the right internal controls.

Maintaining Effective Internal Controls

Organizations need to prevent and detect fraud in a way that others working in the company aren’t bothered. By slightly modifying the existing organizational processes, companies are often able to overcome business challenges in an effective manner. Sometimes they are successful, sometimes they fail. It all depends on how well you leverage your internal controls. For a typical company, separation of duties is a critical tool that helps evaluate performance on an individual scale. This way, you get to know whether your employees are stealing from you or not and, if they are, you will know who is stealing!

Additionally, you need to make sure that your employees abide by the policies and procedures. Encourage your employees to document each and every thing for you to know what exactly is lacking or where the problem is exactly. These are some of the ways by which you can maintain a proper internal control in your organization.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

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It can be hard to retreat from the everyday routine of maintaining a business under strain, to meet the weekly or monthly payrolls or pay banks and suppliers. Although it is difficult, it is certainly not impossible, particularly when SMEs focus on their efforts strategically.

The most glaring issues that have been observed in the course of the last 20 years include:

 

1. Inability to either recognize competitive advantage or adjust the required strategy

It’s basic to continually review your methodology consistently to assess changing economic situations and client requests. Furthermore, it is also crucial that the nature of competitive advantage is recognized as to whether it is resource-based or positioning-based. Until this is recognized, the required strategy cannot be adjusted accordingly. This is one area where bookkeeping can reveal where the competitive advantage of business lies.

 

2. Coming up short on liquidity

Liquidity is a constant danger to any SME. It is imperative to never risk more than you can bear to lose. Working capital management is a consistent test for SMEs. Maintaining ideal or effective levels of liquidity is also crucial to efficient bookkeeping.

 

3. Recognizing exceedingly talented professionals

Enlisting ideal individuals is never simple for SMEs, albeit, numerous SMEs simply don’t put enough exertion into this aspect of the business. Walt Disney expressed “You can dream, make, plan and fabricate the most awesome place on the planet. But, it requires individuals to make the fantasy a reality.” Similarly, the aspect of bookkeeping is taken lightly by SMEs. It is of paramount importance that individuals charged with preparation of financial statements and finance management be exceedingly talented. Otherwise, it is likely for SMEs to lose more than what they gain.

 

4. Failure to systemize bookkeeping

Systemizing bookkeeping is essential to keep the business lean and proficient, so as to maintain a strategic superiority from the competitors. It gives a better insight into decision making.

 

5. Absence of business/brand awareness

Numerous SMEs are not successful in getting their message out there. SMEs are like hidden treasures if they cannot be accessed by their potential customers.

 

6. Not being a step ahead of the competitors

There can be a clear absence of comprehension of the significance of continuous instruction, preparing, training and coaching. Organizations need to continue rethinking themselves to some extent; today’s news is tomorrow’s waste paper.  

 

7. Having an inaccurate pricing model

Not charging enough for your service or product is a typical issue with numerous SMEs as they underestimate their own particular worth. This is the place you require great bookkeepers and consultants to give expert insight and support.

Thoughts are simple, implementation is hard. You must inquire as to whether you are building a business to make value or simply searching for an occupation.

SMEs and privately-owned companies have heaps of opportunities to respond rapidly and offer individualized services. Extensive organizations have a tendency to be moderate and bulky, winding up exceptionally systemized and set in their ways. That is one reason why you see expansive corporations purchasing littler organizations to develop and remain in front of the market. Jack Welch, ex CEO of General Electric, was quick to depict his huge company as several little independent groups. He was a major backer of little, adaptable, and individual businesses.

It is important to take some time out of the everyday running of your business. Audit your methodology to assess changing economic situations, go up against the distinguished difficulties head-on and grasp the open opportunities that come in your direction. Doing such will help set your SME up for development and success.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

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The success of small to medium-sized enterprises (SMEs) is often viewed as an indicator of overall economic health. Moreover, businesses with less than 250 employees may be simpler to manage than multinational with companies having thousands of employees. Consequently, the matters of scale result in a different mix of challenges. However, there are many peculiar challenges that businesses face with implementing human resources (HR) systems and policies in an SME. The issue prevails because, unlike large organizations, SMEs tend to take HR issues and concerns for granted and ignore them either partially or fully. In fact, they only take action when matters have reached their peak thus the scenario becomes out of their control. Moreover, HR matters are more complicated than accounting which can be rectified by scrutinizing and correcting the bookkeeping issues.

Consequently, small to medium-sized enterprises have to adopt best HR practices and procedures to ensure that they accomplish their company goals and business objectives. You do not need to have huge funds as long as you have the right people at the right seats, putting processes in place at the right time. Here are some of the common HR issues prevailing with SMEs:

1. Absence or Lack of HR Department in SMEs

Most of the small-sized businesses and some of the medium-sized enterprises have no HR departments. Mainly because they perceive that having a fully functional HR department is an additional cost. Hence, in the absence of an HR department, workers tend to solve workplace issues themselves which can result in chaos and issues among the workers. Therefore, they are often vulnerable to the concerns affecting their morale and job motivation.

2. Managing Talent

Lack of talent management is another big issue prevailing in SMEs which ultimately affects the following HR processes:

Recruitment:

The HR process begins with recruiting the ideal candidate for a position. Remember, the quality of individuals you hire will eventually determine the success or failure in the long term. SMEs typically start recruiting the referrals; their relatives and people they know or individuals related to shareholders. This is okay as long as the merit is the base on which the people are employed. However, SMEs normally prefer relatives and friends with the assumption that they are easy to deal with and willing to work for them at a lower rate. However, the downside of this practice is that the hired friends and relatives often lack requisite skills and expertise and can cost a lot to the company in the long run. Moreover, there is usually no formal recruitment process in family-owned small businesses, especially acquired by succession or inheritance.

Training and Development:

In today’s developed business societies and with the current market scenario, organizations should acquire an adequate pool of skilled and experienced employees. Therefore, large companies demonstrate concrete efforts to not only hire smart and skilled people, but also upscale their abilities and potentials by making them go through various training and development programs. However, SMEs often tend not to rely on external training and development programs, mainly owning to budget constraints. Therefore, either they conduct on-the-job or in-house training, which often produces lower results or provides no training at all.

Reward and Remuneration & Performance Appraisals:

Reward and remuneration is another essential HR aspect that all organizations, irrespective of their size and nature, should effectively use to motivate their employees. They must have a transparent and dependable system of setting the salaries for their staff. However, many SMEs either have a vaguely structured reward & remuneration system and performance appraisals or none of them at all. This is primarily because other structures like a job description for different roles, competency framework, and values for the different roles are not well-defined. Moreover, small business owners or managers are mostly busy or are not well trained to handle more than average ‘performance’. In fact, most SMEs are not too focused towards scale and growth to tackle appraisal processes.

Talent Retention:

Retaining competent employees at the junior level is often a big challenge with SMEs. This junior level mostly consists of workers with functional skills like electricians, field salespersons, etc. This class is significantly mobile and rarely available in job shifts recurrently and may even quit working without giving prior notice. The unexpected loss of employees sometimes affects SMEs, especially during the seasonal days. Moreover, vague role definitions, lack of career prospects, or any perceived unfairness in the remuneration or appraisal system can trigger thoughts of attrition among workers. HR managers should be aware of employees’ engagement at all levels of the enterprise and their retention drivers.


3. Maintaining the spirit of innovation and entrepreneurial culture

Bursting with excitement, aspirations, expectations and immense potential, SMEs in their starting days often cater business culture that is fun, fast-moving, innovative and entrepreneurial in nature. Such culture is mostly comprised of young, energetic team members who show great coordination and dedication, work closely with each other, and frequently interact with their seniors and business founders. However, SMEs tend to lose such spirit as the business begins growing and becomes mature. Therefore, due to conventional ways of business management, they often fail to grow further. In fact, at some point it becomes a challenge to sustain in the competitive market.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.