There's no doubt that careful use of the Internet can turn up plenty of detailed information about finance. However, it might pay to leave Google out of the equation when making financial decisions that could impact the health of your business.
According to a new study by IGF Invoice Finance, a third of small businesses use Google and social networking sites for financial advice. While reports that SMEs are making greater use of the Internet may sound predictable and harmless, this change is being accompanied by a less innocuous trend: declining use of professional financial experts.
Is using online sources risky?
IGF found that only 34% of respondents preferred their accountant to the web when seeking money-related advice. According to the group's Managing Director, this figure is cause for concern:
"Without advice, SMEs simply cannot make an informed decisions [sic], and in business an uninformed decision is often a wrong decision.”
Education experts have warned that the web may ‘infantilise’ learning, and it's certainly true that businesses risk missing important details by turning to the Internet for quick financial advice. According to The Independent however, the real threat lies in SMEs using generic and outdated information as the basis for key business decisions.
Research suggests that 25% of SMEs depend on friends and family for financial support, while another study revealed that most small businesses' accountants do not use advanced tools like cash flow and cloud-based software. In light of these findings, it seems that increasing use of online money advice may be a symptom of a wider problem in SMEs: failure to devote appropriate time and resources to financial planning.
Can small businesses afford to skimp on financial advice?
Unfortunately, it would appear not: the Association of Chartered Certified Accountants recently discovered that the fastest growing small businesses are those that treat Financial Officers as full strategic business partners. Though it may be tempting to cut corners, the evidence strongly suggests that aligning business strategy with financial realities is crucial.
For expert advice on improving your company's finances by recouping unpaid debts, contact Dukes Bailiffs Limited today.