It is reliably estimated that 50% of all small businesses in South Africa fail within the first 24 months of operation. Research by UWC has revealed that this statistic goes as high as 70-80% within the first 5 years. The reasons for business failure range from lack of planning, being a one-man show and failing to maintain accounting records.
Most small businesses fail due to cashflow pressure. Even the most profitable small business will fail if cashflow is not regularly flowing into the business to cover working capital and other operational needs. As the small business owner, it means that you need to have your finger on the cash pulse – you need to understand where your Rands are coming from and where they are going to. With this information, you then need to make informed decisions to support and grow your business bottom line.
At MMS Cloud Accounting, we would like small business owners to be more aware of the key financial disciplines that will assist you in managing cashflow:
The good news is that Xero cloud accounting software has the artificial intelligence to do most of the processing for you, with a few basic rules set in place. We would like to see every small business in South Africa being successful, and offer a range of value-for-money accounting packages to our clients, needing financial accounting services. If you need the support of a team that understands the difficulties involved in running a small business, don’t hesitate to reach out to us.