Forgetful businesses ‘lose out on £3.7 billion’

October 9, 2013 | by | 0 Comments

Businesses are losing billions of pounds by forgetting to bill clients, according to new research.

Bosses at one in five companies admit forgetting to invoice for goods or services, blaming poor communication with their accountants and confusing paper records.

Some 13 per cent of the forgetful bosses didn’t charge for work worth between £5,000 and £10,000, while seven per cent forgot to bill for goods worth more than £10,000.

The research by finance software provider Exact said the mistake could have left the UK’s 4.8 million small and medium sized businesses out of pocket by up to £3.7 billion.

Hartmut Wagner, managing director of Cloud Solution at Exact said: “We don’t want to blow this issue out of proportion but these findings do highlight that many small and medium-sized enterprises working in professional services, who are eager to grow, are not doing themselves any favours by letting millions of pounds worth of work go unaccounted.”

Accounting experts blame poor communication between accountants and clients for the mistakes.

Researchers claim that just over one third of businesses they asked still use paper records during their accounting processes, and only 11 per cent are using more reliable online accounting systems.

Mukesh Shah, head of outsourcing at accountancy firm HW Fisher & Company, said: “Being fully in control of your finances is clearly vital to better business decision making.

“Businesses, including those in professional services, are placing more and more faith in their accountants, not just to sort out their books but also in advising them over broader business decisions, and in a large proportion of cases that appears to be hampered by poor systems and processes.

“The findings of the Exact research seem to suggest that there is a real need for better working practices and processes to be in place between accountants and their small and medium-sized enterprises clients – something we pride ourselves with.”

Category: SWNS

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