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SMEs and Company Formation Owners Poor Financial Management

One of the main reasons many small businesses and recent company formations have gone into administration during the recession, poor cash flow and ineffective financial planning. Therefore, the results of a recent survey carried out by finance company AXIS – which found that over 50% of small companies admit to feeling “out of control” when it comes to their finances – are even more concerning.

According to the report over 50 % of small businesses say that they do not have the resources or systems in place to chase late payment, while a worrying 35% say that they do not check their cash flow situation or bank account weekly.

James Scott, entrepreneur and small business advisor comments; “If you ask any successful business owner for their main piece of business advice, most would say making sure you get paid on time. Cash flow is the most important aspect of any organization, from large corporations to one-man bands. Therefore, the findings of this report gives great cause for concern.”

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