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23% of SMEs have failed to invoice for work

07 October, 2013

Small and medium-sized manufacturing businesses in the UK could be losing out on millions of pounds as a result of poor internal systems, according to a new survey which reveals that almost a quarter (23%) of SME manufacturers have forgotten to invoice for goods or services at least once.

The survey of 450 SME businesses, commissioned by the business and finance software supplier Exact, found that around 41% of manufacturers had not invoiced for a job worth between £1,000 and £5,000, while 12% admit to having forgotten to invoice for a job worth more than £10,000.

The survey also showed the biggest cause of stress for SME manufacturers is worries over finances (29%), with pressures related to winning new business (28%) and worries about workload (21%), coming second and third respectively.

Close to a third (29%) of business owners and leaders in manufacturing admit that they don’t feel fully in control of their accounts and business finances.

Over half (52%) of the SMEs admit that they have had to defer payments due to cash-flow problems, including failing to pay their staff’s wages on time (13%). A third (33%) have failed to pay suppliers on time; 16% have failed to pay loan or overdraft repayments on time; and 15% have filed tax or VAT returns late.

More than half (54%) of the SME leaders trust their accountant more than anyone else – including their own business partners ­– when it comes to broader business issues. But the lines of communication with these trusted partners don’t always appear to be good. Most accountants (61%) communicate with their SME clients no more than once a month.

The survey’s sponsor, Exact – which happens to offer cloud-based accounting services – attributes the low level of communication partly to the processes involved. One-third (33%) of all SMEs use spreadsheets or paper records as part of their accounting processes, and only 14% are using cloud-based accounting systems.

“We don’t want to blow this issue out of proportion,” says Hartmut Wagner, managing director of Cloud Solution Exact, “but these findings do highlight that many SMEs working in the manufacturing sector who are eager to grow are not doing themselves any favours by losing out unnecessarily on millions in revenue income, particularly with so many expressing concern over their cash-flow.”

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