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Common SME's and Startups Bookkeeping Problems and Solutions

Updated: Apr 1

The US Bureau of Labor Statistics reported that nearly 20% of the small and medium-sized business SME's fail in their first year and about 50% make it to see year five of operations. Reasons could vary from addressing the right products or services to balance customer supply or demand or even cybersecurity issues. But some of the most significant problems that SME's need to face on regular bases are financial.

Startups and emerging businesses need to equip and ready to face the early bookkeeping challenges or they are going to find operational and financial hardship to sustain. To name some factors that contribute to accounting frustrations; lack of cash flows visibility, late issuance of business financial statements, understating and undermining engaging with an independent financial auditing firm and obtain its opinion on the business financials and finally difficulties in understanding and interpreting what underlies the financial reports.

The good news is it doesn't have to be that way every time. With the right expert-advise, all causes of business failure are entirely avoidable and will help you take control of your finances, make right decisions, and increase business profitability. Solutions that can secure you that your company doesn't become just another statistic of your local chamber of commerce office.

What are the signs of accounting problems that you need to be aware of beforehand?

1) Failure to get financed. Your inability to obtain bank funding can be of several issues. Accounting team may be applying to too many places at once, making it difficult to follow on all application instructions, might not have the requested data. Or worse, your finances might be in poor shape that you don't qualify.

2) Payroll and overhead costs. Any business should pay its employees first and should strive to cover its operational overhead costs. If your financial records show that your daily or monthly sales are not enough to cover your staff payroll and overheads this means your core sales team or front liners are missing the right skills or failing to generate the right business opportunities

3) Monthly financial closing processes. Inability to continually and periodically prepare the monthly closing of books of accounts by your accounts team there's a good chance that something will be overlooked, leading to errors and misstatements and finally a financial disaster. Bookkeeping mistakes could be unreconciled accounts, or wrongly allocation of expenses, or mismatching in payroll reconciliation, or other accounting mistakes that will be challenging to correct in the future.

4) Timely completion of business monthly financial statements. Business decisions depend on how accurate and up to date are the books of accounts. Business is as good as its financial information, failure to maintain timely updated books of accounts will lead to being the financial data unreliable or unavailable. How will management decide on staffing, inventory, or equipment replacement with outdated or misinformed financial information?

5. More excuses instead of getting results. Never take things for granted, If at some point you hear excuses from your accounts team instead of seeing results, it's probably time to make a change. Your business's future is too important to leave something like this to chance.

So, what are the solutions to these accounting problems and challenges?

Whether you see signs of bookkeeping problems in your business or you want to make sure that they never happen, we want to share with you some of the most solid solutions to these challenges include:

  • Technology & Automation: managing business financials in a semi-automated or the old-fashioned way is good enough but only good enough at the early stages of your operations. Using tools such as excel or numbers might work in the opening days, but a more robust system might be the best solution. The preeminent way is to use accounting software that provides regular, automatic updates. Such as QuickBooks online, Zoho Books is an online accounting software which operates and saves your data on the cloud, you can work from anywhere on multiple devices and can easily access your records and reports securely.

Embracing technology makes operations more straightforward and more efficient.

For example, a lot of weight can be taken away with automation if we integrate our

accounts payable systems with our banker or 3rd party suppliers. No data entry

requirements, entries are automatically pushed through the different integrated systems.

At Assist Plus, we provide on the cloud sound solution for accounting and bookkeeping

transactions, so you and your focus on the bigger picture. More productivity and collaborate

more effectively yet scale your operations with ease.

  • Outsourcing. One of the quick wins that can ensure accounts are maintained efficiently is to consider outsourcing your accounts functions. This is particularly effective when you choose a partner or professional that has a higher skill level. At Assist Plus Accounting and Auditing services, we dedicate a team of finance experts and certified accountants who are highly experienced recording, and fiscal auditing activities of organisations, whether weekly, monthly, quarterly, or yearly. We can provide clients with a variety of reports, from day-to-day bookkeeping to financial forecasting, in formats and templates they prefer. These include:

  • Budget and fiscal planning

  • Cash flow reports

  • Accounts Receivables / Accounts Payables

  • Balance sheets

  • Income statements

  • Stock holdings

  • Owner equity statements

  • Debtors and creditors statements

  • Daily or weekly accounting entries

  • Bank and credit card reconciliation

  • VAT returns preparation

  • Company yearend accounts

  • Submission of annual returns

  • Management accounts

  • Personal VAT and TAX returns

  • Corporation VAT and TAX returns

  • Payroll processing

  • Accounts payable

  • Accounts receivable

  • Credit control

  • Management Reporting

  • Training. Times change, and it would be a shame to fall behind or even lose your business because your accounting team has failed to stay up to date. Our programs are earmarked for employees working in government agencies, public institutions and private sector companies. These programs aim to meet the training needs for personnel working within these authorities and contribute to providing participants with functional skills to facilitate performance improvement and allow for sharing experience amongst participants from other agencies. We can deliver in both languages, English and Arabic, which fits best for your company

Benefits of Addressing Accounting Department Shortfalls

  • Visibility to the company's cash position.

  • Opportunity to make more timely and better-informed decisions.

  • Improved banking and vendor relations.

  • Accurate and timely data for strategic initiatives.

Don’t settle for normality aim for a stronger state and healthier operations and financial position. A competitive advantage can is gained when business financial performance is accurate, reliable and reported promptly. Right solutions are available to support and make the right decisions to increase their profitability and sustainability.


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