New figures reveal poor financial management practices caused one in 10 small businesses to lose money through unnecessary fines and penalties last year.
The First Class Accounts Small Business Barometer found 11 per cent of small enterprises in Australia had missed a BAS deadline – some three-quarters said they had simply overlooked the submission date.
Yet the cost involved in making this mistake is high. More than a quarter (28 per cent) had to pay over $500 in penalties.
However, poor financial management practices extended beyond BAS paperwork.
More than three-quarters (77 per cent) admitted they didn’t set an annual budget. A further 70 per cent said they checked their profit and losses just once a month or less.
Chief executive of First Class Accounts, Joe Piovesan, said the report findings highlighted the need for small business owners to give greater attention to their day-to-day financial management.
“Many business owners put financial administration duties like bookkeeping at the bottom their list of priorities,” he said.
“While it’s understandable they’d rather spend their time boosting revenue and growing their customer base, they risk reducing profit through poor financial management,” Piovesan added.
“It’s important for a business of any size to keep on top of their finances in order to maximise profit. This includes meeting BAS deadlines, monitoring cashflow and evaluating profit and losses regularly so they can spot and address any potential problems as soon as they occur.”
