Britain’s start-ups are running a financial gauntlet, often running low on cash with little visibility of their profitability, cash flow or debtors, according to research from financial software maker Intuit.
The report coincides with the launch of QuickBooks 2012, the latest release of Intuit’s popular financial management software.
The research, based on a poll of 500 businesses less than five years old, shows that small businesses are critically vulnerable to outside factors. These include restricted access to credit, rising inflation and falling consumer spending. The report found many small businesses are:
•Walking a financial tightrope – 42% set up on £1,000 or less; about one in 10 (11%) ran out of cash whilst one in three (33%) came “very close”
• Driving blind – Three-quarters (75%) rely on manual records – either pen and paper (21%) or spreadsheets (54%) – offering limited insight into the state of their business.
• Feeling the pressure – Less than a third (29%) think they managed their finances “well” or “very well” in the business’s early stages; 74% found managing their finances stressful in this period.
• Optimistic despite the gloom – Half expect to grow their business in the next year, despite almost half (44%) saying that trading conditions are worse now than six months ago.
Challenges: Getting paid and cash flow
Many small business owners said ‘getting paid’ and ‘cash flow’ are two of the top four challenges facing their business – 40% and 31% of businesses surveyed respectively.
Financial management software, such as the new QuickBooks 2012, can make it easier for UK small business owners to solve these problems.
Pernille Bruun-Jensen, UK managing director for Intuit, said: “Managing your finances efficiently is as important as winning new clients when it comes to keeping a young business ticking over. Spend more money than you make and you’ll fail, regardless of how brilliant or busy the business is. Knowing what’s coming in and what’s going out remain the absolute fundamentals in running a successful venture.”
Bruun-Jensen added: “By getting started with spreadsheets or pen and paper records, many business owners find it very difficult to graduate their systems as their business grows, thereby compounding the problems they face in managing their accounts. Often they are unaware that there is a better way or are worried they need accounting knowledge to use financial management software. In launching QuickBooks 2012 today we aim to help make it easy for small businesses to manage their finances better and save time.”
QuickBooks is the No. 1-selling small business accounting software in the UK, according to GFK RT accounting software data for retail desktop units from September 2010 through August 2011. The new version is easier to set up and use with many improvements to help small business owners get up and running in fewer steps, stay on top of their finances with at-a-glance views of key business information and save time on every day accounting tasks.
Pricing and Availability
QuickBooks 2012 is now available from quickbooks.co.uk.
QuickBooks 2012 is available in six versions:
• QuickBooks Simple Start – £99.00.
• QuickBooks Pro – £269.00.
• QuickBooks Premier – £499.00.
• QuickBooks Pro + Payroll – £41 per month.
• QuickBooks Premier + Payroll – £60 per month.
All are available for download from quickbooks.co.uk. Selected retailers, including Amazon, PC World and Staples, will have the product in November.
QuickBooks is ICAEW and HMRC Payroll Standard accredited.