78% Could Do BBBetter
78%* of SMEs have financial departments that could cost less or work harder. That’s only just over 20% that are working at an optimum level for business owners and investors.
These are the top five reasons that contribute to the inefficiency:
- An overreliance of manual processes and systems…yes - that includes an excessive use of Excel
- Reworking of tasks already completed that need adjusting or redoing due to errors. This includes errors to 3rd parties such as the ATO and any work that your accountant needs to do on your behalf at EOFY
- Under-qualified finance staff completing tasks that require specialist knowledge. Not only do a mismatch of skills tend to slow people down (excessive checking of calculations), staff turnover in these situations are higher than the average due to the pressure it puts people under
- Investment in software not being leveraged to its full potential. It’s estimated that more than half of all software and systems installed revert back to their pre-inefficient state before installation. That means your inefficient AND you’ve invested to ensure that you continue working that way
- A great financial function will flag your process flaws as they occur. When everything’s working as it should, what’s not sticks out like…well, you know what we mean! Inefficiencies mask a whole Pandora’s box of errors, loss and potential fraud
So ask yourself this question – how much does being compliant and producing the financials in my business really cost me?
Follow this simple step-by-step to find out whether you’re a 78%-er or a 22%-er:
- Divide a sheet of paper into three vertical columns
- Add together all the wages of those in your finance department (if they’re permanent employees, add 22% to this figure for super, employment taxes and leave costs). Add to this all of your time spent working IN the financials not ON the financials – put this into Column 1
This is how much your financials are currently costing you BEFORE it gets to your Accountant
- Now list everything you wish your financial person or department would deliver to meet your obligations and give you the knowledge to make smart, future-led business decisions – put this into Column B
This is what you’re losing every month that goes by where you do nothing different to what you’re doing today.
- Now, in Column C decide on the following – would you prefer the same tasks delivered in Column A less 10% fixed for the next 12 months OR would you prefer everything on the list in Column B for the total in Column A, again for a fixed fee
Then ask yourself, if I was a 78%-er and was given the opportunity to at least talk it through with someone who had a track record of costing me less or making my overhead work harder for me – I would, wouldn’t I?
You would, wouldn’t you?
BBB, a SA 2014 Telstra Business Award finalist, has spent the last eight years assisting SMEs to drive value through financial processes through our unique approach of Program + People + Process. As industry leader in providing SMEs with services such as bookkeeping, management reporting, system process improvement and integration of business systems and accounting software to SMEs, BBB work on the front-line to assist business to replace their heavy, old-school finance department with a resource for the future FOR LESS.
*-2014 BBB Survey of SMEs in Adelaide, Sydney and Melbourne. Sample size: 126 respondents