What Small Business Owners Don't Understand Could Be Holding Them Back
Sage North America announced April 18, 2013, the availability of Sage 50 Accounting 2014-US Edition for small businesses. The 2014 release coincides with National Financial Capability Month. Sage North America also released findings of a survey to determine the "financial literacy" of small business owners by gauging their overall perceptions, knowledge, and habits with regard to financial management, resources, and compliance. Sage, a leading provider of business management software and services to more than six million small and midsized businesses worldwide, conducted the survey in March 2013 with more than 700 small business owners.
The Sage Financial Capability Survey reveals that while most small businesses can identify the cost that has the biggest impact on their business, 15 percent still struggle to recognize it. However, more than half (54 percent) of small business owners recognize that cash flow is the aspect of financial management that is most important to their business' success.
The survey also examined the differences in financial literacy between those small business owners who use accounting software to help manage their day-to-day operations versus those small business owners who do not. Both accounting software users and nonusers realize that cash flow is an important factor for their business' success (38 percent and 39 percent, respectively), and they consider accounts payable (74 percent); accounts receivable (70 percent and 71 percent, respectively); and invoicing/billing (69 percent and 74 percent, respectively) to be strengths, meaning they believe they can perform these tasks adequately.
However, small business owners who use accounting software have a different set of concerns when it comes to their financial capabilities. Accounting software users report that payroll and inventory management are their top concerns (52 percent and 50 percent, respectively), while nonusers report account receivables, accounts payables, payroll, inventory management, and invoicing being their main concerns (54 percent, 49 percent, 49 percent, 49 percent, and 46 percent, respectively), despite reporting that they believe these activities are also their strengths.
"It's no surprise that most small business owners wear numerous hats and tend to take a very hands-on approach with managing various aspects of their business, but based on the Sage Financial Capability Survey, those who use accounting software seem to be more confident and have a better understanding of what they are capable of managing and what they need to learn more about to make their business a success", said Connie Certusi, executive vice president and general manager at Sage Small Business Solutions. "While there's no doubt that those small business owners who don't use accounting software are successful, based on the survey, it's indicative that there are several business activities that they need to be more versed in. They are potentially holding themselves back from even more success by not truly understanding cash flow and how to manage the financial health of their business."
Small businesses need to comply with many rules and regulations imposed by all levels of government, and income tax is the activity that small business owners are most concerned about complying with (23 percent), followed by social security/payroll taxes (16 percent). Small business owners who use accounting software are significantly more comfortable with complying with income tax rules than non-accounting software small business owners, with only 17 percent reporting it as a concern versus 29 percent.
"The sheer number of changes to the tax system over the past thirteen years is astonishing", said Certusi. "With more than 4,400 legislative changes to the tax code, small business owners are struggling to stay current. Our survey indicates that complying with tax rules and regulations is a concern for small business owners, especially those who do not use accounting software. As the tax code continues to change and grow in complexity, it's crucial for small business owners to get the appropriate guidance from an accounting or bookkeeping professional or use accounting software to help ensure they can confidently meet any compliance challenges they may face."
To help small businesses gain better control of their operations and remain compliant with ongoing tax code changes, the Sage 50 Accounting 2014 product line is now available. A perennial favorite of small businesses and accountants, and a part of the broad portfolio of Sage business management solutions serving small to medium-sized businesses worldwide, Sage 50 Accounting 2014-US Edition delivers many benefits and features that small businesses need to maximize their investment and gain a better insight into the overall financial health of their business.
New features of Sage 50 Accounting 2014 include enhancements to accounts receivable, making it faster and easier to record outstanding customer invoices, streamlined accounts payable processes, and increased advice and guidance through Sage Advisor technology.
Sage 50 Intelligence Reporting is also available for the Sage 50 Accounting 2014 line, giving small business owners the ability to gain sharper focus, access, and insight into their business information.
Sage 50 offers industry-specific versions for manufacturers, distributors, construction businesses, and accountants as well as Sage 50 Quantum Accounting 2014 for businesses with more advanced needs.
Sage 50 is one of the entry points into the Sage portfolio of business management solutions that support long-term business needs and includes Sage 100 ERP, Sage 300 ERP, Sage 500 ERP, and Sage ERP X3 solutions as well as a host of complementary connected services.
Pricing and availability
The Sage 50 Accounting 2014 product line is now available direct from Sage and will be available through both in-store and online retailers in June. The suggested retail price for Sage 50 Accounting 2014 starts at $269.99. Call 1-800-228-0068 for more details.
The Sage Financial Capability Survey was conducted in March 2013 among 386 Sage customers and an independent sample of 327 small business owners who do not use accounting software. All respondents are US business owners of organizations with fewer than 100 employees. The margin of error is +/- 5% with a confidence level of 95 percent.
Source: Sage North America Press Release