by Maiju Rauma
Today we’ve launched our inaugural SMB Finance research.
It surveys 558 business owners and 1,368 employees with financial responsibility within small to medium enterprises to see how SMBs’ finances are taking shape across different locations, with samples from across the UK, US, Sweden, Germany and Belgium & Netherlands.
Given the relative size of SMBs, and within that, the finance function required to make them tick effectively, the research paints an intriguing picture of where financial responsibility sits within micro, small and medium-sized business.
Perhaps more interestingly, it illuminates a disconnect between what business owners and their employees expect from the finance function. How are business attitudes determining where financial responsibility sits within the organizational hierarchy?
53% of small and 59% of medium sized business owners believe the responsibility for setting budgets, controlling payments and determining the company’s financial strategy lies with senior management, despite 1 in 3 senior managers admitting they are unprepared to take on the role. Moreover, a staggering 45% of senior managers haven’t even received the correct financial training to complete their role properly.
This issue is not dictated by the geography of the business either – 28% of employees in Europe and 33% in US want a greater understanding of how to manage company money.
So, with financial responsibility being handed down from owners to senior managers, why don’t employees in this role have a greater understanding of how to do it?
It is not surprising that financial responsibility, alongside a lack of training, is meaning that senior employees are struggling to fulfill their role.
The company as a whole will benefit from appropriate levels of financial support if the necessary employees have the relevant knowledge of financial processes, legislation and strategy.
The findings also suggest that SMB owners should consider whether it is possible to expand the number of employees that engage with company finances. By diffusing financial responsibility, the organization will be able to benefit by ensuring that financial activity is appropriately attended to, easing the burden of senior managers.
The global economy continues to be challenging and SMBs need to think smartly about how they use the resources they have available to them. Finance is a central business function, and the processes that SMBs have in place – as well as the employees responsible for – will determine how effective a company can be as they pursue growth.
Read the Execuive Summary of the research here »