Basware: Senior Managers of SMBs Unprepared for Financial Responsibility Lack of Training, Mixed Sentiment Toward Finances Inhibit Employees’ Ability to Fulfill their Roles Business Wire STAMFORD, Conn. -- January 30, 2013 Fifty-three percent of small and 59 percent of medium-sized business owners believe the responsibility for setting budgets, controlling payments and determining the company’s financial strategy lies with senior management, despite one in three senior managers admitting they are unprepared to take on the role, according to Basware’s SMB Finance research. The SMB Finance research surveyed 558 business owners and 1,368 employees who have financial responsibility for small-to-medium-sized businesses, to identify the financial processes and owners of responsibility across companies in the U.S., UK, Sweden, Germany, Belgium and the Netherlands. This research aims to inform SMBs of the challenges they face in growth, as well as educate business owners on the productivity levels of their employees as ‘small business processes’ reach a breaking point. The findings also help businesses understand the investment needed in people, processes and technologies as they move from ‘small’ to ‘medium’ and beyond. The findings suggest that, with financial responsibility being handed down from owners to senior managers, a much greater understanding of the role is needed if they are to complete it successfully – 45 percent of senior managers have yet to receive formal financial training. Similarly, those higher up the organizational ladder are unprepared to take on this responsibility – 57 percent of board members are untrained. The issue does not appear to be restricted to locality, with 33 percent in the U.S. and 28 percent in Europe wanting greater understanding of how to manage company money. Conversely, with little structure in place within micro-businesses, business owners are much less likely to hold other members of their organization responsible for finances. Fifty-six percent of micro-business owners state that nobody else within their company is expected to engage with financial processes, with board members (27 percent) and senior managers (17 percent) occasionally being trusted with finances. Basware’s SMB Finance research indicates a greater need for simpler and more manageable processes in which employees can engage. In total, 31 percent of employees’ job descriptions in the U.S. and 34 percent in Europe did not include reference to financial responsibility within their roles. With an increasing diffusion of financial responsibility, a more holistic approach that allows all employees to engage with basic financial processes could prove beneficial for ensuring that financial activity is appropriately attended to. Key findings from the SMB Finance research on controlling financial expenditure: *Company spend rules and regulations – Just 18 percent of organizations in the U.S. said that expenditure was controlled by departments and functions, compared to 44 percent in Europe. *Strict rules on company spenders – Only 3 percent of employees in the U.S. say they are not allowed to spend company money, compared to 38 percent of employees in Europe. *Desire for spend authority – Twenty-one percent of employees in medium- sized businesses across all regions say they would like authority to make purchases in their own field vs. 14 percent in small and 6 percent in micro businesses. Bob Cohen, VP, Marketing North America, Basware, said, “In a tough economic climate, SMBs are often competing against larger companies and have to make tough decisions about the control of finances within their organizations as they pursue growth. The SMB Finance research suggests that, regardless of their location and size, all SMBs need to take a hard look at the effectiveness of their finance function, which plays a big role in the overall effectiveness of their companies and their ability to grow. Currently, financial expertise is missing where it really counts, and these discrepancies highlight a need for greater attention to financial needs, processes and focus on how employees are expected to take control of a role for which they have not been trained.” Basware’s SMB Finance research also provides insights into SMB motivations in the current financial climate: *Fifty-one percent of organizations in the U.S. currently consider finding new business customers to support their growth a priority, compared to 61 percent of European organizations *This motivation is particularly prevalent among micro-businesses surveyed in all regions (62 percent vs. 53 percent among medium-sized businesses) *However, medium-sized businesses are more worried about controlling their financial infrastructure, with 49 percent stating cost control (32 percent among micro-business) and 42 percent managing cash flow (18 percent among micro organizations) as a key challenge for their companies Research definitions US medium-sized business: Organizations with between 50—500 employees US small-sized business: Organizations with between 10-50 employees US micro-business: Organizations with up to 10 employees European medium-sized business: Organizations with between 50-250 employees European small-sized business: Organizations with between 10-50 employees European micro-business: Organizations with up to 10 employees About Basware Basware is the global leader in cloud based e-invoicing and purchase-to-pay solutions with more than 1,000,000 users in over 60 countries. Basware’s B2B Cloud solutions and services provide an open, secure and global ecosystem for buyer and supplier collaboration, connectingmore than 1.9 million buyers and suppliers globally. The solutions are architected to meet the needs of SMEs and global enterprises and are built upon Basware’s deep knowledge and experience of B2B financial processes, coupled with intelligent cloud connectivity and the Open Network. With Basware, organizations benefit from more efficient procurement, accounts payable and accounts receivable processes, sustainable cost savings, better insight to cash flows and improved buyer-supplier relationships. The solutions are available via the cloud, on-premise or through business process outsourcing in Europe, the U.S., and Asia-Pacific through an extensive network of Basware offices and business partners. The company’s U.S. business, Basware, Inc., is headquartered in Stamford, Conn. More information can be found at www.basware.com. Basware Twitter: www.twitter.com/basware Basware LinkedIn: www.linkedin.com/company/basware # # # # Contact: COMPANY CONTACT: Basware, Inc. Robert Cohen robert.cohen[at]basware.com 203-487-7905 or MEDIA CONTACT: Pardes Communications, LLC Diane Pardes dpardes[at]pardescommunications.com 781-652-8059
Basware: Senior Managers of SMBs Unprepared for Financial Responsibility
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