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Tertia Barrett discusses “Taking the compliance and financial burden off SMEs”.


Entrepreneurs by nature are often brilliant visionaries that have the drive and resourcefulness to make business ideas a reality. However, amongst small to medium businesses, there is often a gap as many business owners are not equipped with the necessary financial capabilities or training required to effectively manage the financial aspect of a business. As a result, understanding the business’s financial environment in line with compliance for tax and auditing purposes can seem daunting and we have noticed that many SMEs are unable to interpret financial reports and data, which are crucial elements to know if they are profitable or if there are any potential risk areas in terms of over expenditure.

As SMEs expand into new markets in search of growth, one of the challenges for business owners/entrepreneurs is, understanding the financial frameworks and drivers behind that growth. One needs to understand these frameworks or have the necessary tools to aid in monitoring the financial and profit process – which is essential for any small business in a competitive market. Having a great accounting firm on board who can guide you along the way is essential, but doesn’t negate the fact that SMEs need to be able to review and manage their financials on a regular basis.

In order to focus on driving business strategy, they require financial solutions which provide full real time analysis and forecasts on financials that can be integrated with any accounting system and can produce a complete management pack in a matter of minutes. And while certainly there are a few of these on the market, when considering the various options, businesses should be looking at a platform that can provide:

  • A monthly management report pack including an income statement, balance sheet and cash flow statement compared against budget for the month, quarter and year as well as prior year is ideal. This is important if you want a real view of how your business is growing – and make strategic decisions based on accurate data.
  • Reports providing you with a 12-month trend analysis will not only give you a holistic view of your profit and loss over a period, but will give you additional insight like sales or expense trends and how these trends are affecting your profit. This will allow you to plan better for the coming year.
  • We all know cash is king, so a cash flow forecast is key to managing and planning for this essential aspect.
  • A solution that includes financial ratios is an added bonus as it measures a company’s liquidity, leverage and profitability and will go a long way in providing you with an idea of how your company is performing.
  • Implementing a financial reporting solution not only assists with management, it can also assist businesses to identify inaccuracies and eliminate risks – ensuring that any inconsistencies can be identified, correlated and presented as one overarching financial outline. Furthermore, implementing these kinds of tools reduces the time involved in preparing these reports, allowing the owner to add more value to the bottom line by spending time on data interpretation, rather than its preparation.

Starting your own business on a sound financial footing is critical to its long-term success and growth. Having the right management reporting tool will make it possible to generate reports within minutes, be compliant with small business regulations, and ultimately enable you the business owner, to make sound business decisions to support continuous profit and expansion. SMEs should therefore move towards systems that do not hinder their bottom line but one that encourages business growth.

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