Basware: Senior Managers of SMBs Unprepared for Financial Responsibility

  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

  *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

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Basware, Inc.
Robert Cohen
Pardes Communications, LLC
Diane Pardes
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