One-in-five SME owners still rely on pen and paper to run their business
New research indicates that one-in-five SME owners are using nothing more than pen and paper to run their business.
The study conducted by Worldpay, a global leader in payments processing technology, also showed that 48% of SMEs in the UK are unable to identify their top 10 customers and their ordering habits, while 57% cannot pinpoint their busiest trading day.
The research also showed that 40% cannot provide revenue or profit forecasts and almost two-thirds (62%) admitted they were unable to identify their three top-selling products.
Duncan Montgomery, tax partner at UK200Group member firm Whittingham Riddell, said:
These statistics are shocking. A properly set up system can deliver top 10 customers in about six seconds, together with high and low performing products, what credit notes have been issued and so on.
Once a business gets to a certain size the owners cannot run it manually and the lack of systems improvement costs the business and the owner money and time. Recognising that early and moving on to a better business system, that is more efficient and enables owners to make proper decisions based on real-time information is critical to compete, particularly if your opposition is already there.
Jonathan Russell, partner at UK200Group member firm ReesRussell, said:
There is nothing new in finding out that many small businesses still record, and do most of their business analysis, with pen and paper. There is also nothing new in surveys done by companies wishing to provide data and technology solutions saying how much better things could be using technology.
However, just because technology can do something it does not necessarily mean that is the best way. Certainly, there are businesses out there that could and should use their data better, but equally there are many where the proprietor’s knowledge, experience and possibly their paper records are the best way.
Data is only as good as the use it is put to and many small businesses actually need very little data to be efficient and successful. In fact, too much data, often the result of technology, can be a bigger problem. Worldpay’s research point out things that some small businesses might not immediately have to hand, but so what if they don’t need it.
There is information every businessman needs every day, some weekly, some monthly or annually and maybe longer and if the systems they have, give them that information easily at the time they need it then that is much more important than having lots of information where the important facts might get lost in the volume.
The message should be to businesses to establish the information they need and require and to use the most effective way of getting that information, which might be the use of technology, but equally well it might be a pen or pencil on the back of an envelope.