Small Business Matters

Digital Britain report – impact on UK small businesses

Last week’s Digital Britain report will have a positive effect on many UK small businesses, but could be considered a baby step in the right direction for those aiming to compete internationally. The Government outlined its commitment to ensure universal access to faster broadband, which will make a huge difference to small business owners, particularly those based in rural areas. Many owners rely on the internet to conduct their business, and in the report, the government acknowledges that entrepreneurs are using digital technology to “revolutionise how they operate through online marketing and sales, improving accounting and internal procedures, online tax returns and record keeping and payments.”

The ability to improve accounting and internal procedures is more important than ever in the recession where small businesses are fighting for survival. In addition, as more financially-savvy consumers opt to spend online in search of the best deals, the internet is increasingly a vital channel that small businesses can use to reach a wider audience with their products and services.

Bridging the funding gap for small businesses

With the availability of finance still a big issue for many small businesses, the government is launching another initiative to help them not only access the funds they need during these challenging times but to grow as well. Following the Small Firms Loan Guarantee Scheme and the Enterprise Finance Guarantee Scheme, the Department for Business Enterprise and Regulatory Reform (BERR) will be conducting a review to consider whether there is a role for government in facilitating public and private investment to help small businesses access capital to grow. The review, which will consult businesses, investors and government before reporting to Business Secretary Peter Mandelson ahead of this year’s Pre-Budget report, follows government promises to stimulate growth using private sector resources and expertise to bridge the funding gap. The idea is that where conventional bank finance may not match a business’ risk profile and growth aspirations, the government will leverage private sector monies to provide this growth finance and risk capital, and ensure high-growth businesses that will be very important for the economy are able to secure the capital they need going forward.

 

Small businesses losing out on false expense claims

A recent survey by professional networking site LinkedIn has highlighted that unfortunately employees of all kinds (not just MPs) can be tempted into unethically supplementing their own income. Up to 40 per cent of UK small businesses have lost money from staff putting through inaccurate expenses claims according to this research, while another quarter of the companies questioned admitted to having no idea as to the extent of staff making false claims. Furthermore, only half of respondents could be confident that they hadn’t lost any money through staff lining their own pockets with company cash. With a recession in full flow, this practice could grow with people looking to take advantage of avenues that can improve their bank balance.

For small businesses, illegitimate expense claims can leave a dent in finances, significant enough in the current climate to cause cash flow problems. This can be mitigated by keeping tab on all money that comes in and out of the door through some effective cash flow management. With one in 10 small businesses, according to additional research, now assessing their own expenses systems by tightening up processes, investing in new accounting software or boosting accounting staff, cash flow can improve. However, every small business can take preventative measures by implementing a simple and efficient finance management system and it doesn’t need to cost much. But it can sure help highlight where the cheats are!