News

March 27, 2015

Firms risk losses with unqualified finance staff

Over one third of the people responsible for handling finances in SMEs don’t have a relevant qualification, according to findings from the Association of Accounting Technicians (AAT).

It means that every SME in the UK could have lost £1,277 on average; equating to £2.9 billion across the UK economy. These losses are typically due to tax miscalculations, unpaid invoices and fines.

According to the AAT, this “silent risk” represents a significant threat to businesses that often rely on staff members to take on a number of roles, including finance, for which they may not be qualified.

The research has found that only 26% of SMEs have one or more dedicated members of staff looking after finance or accounts; and 36% of those tasked with managing the books are unqualified. In most firms (60%), it is the owner who is responsible for company finances on a day-to-day basis.

The poll found that 61% of those staff that manage finances also have another role, with 50% also responsible for business development and sales and 34% involved in office management.

Almost half (48%) of finance staff without qualifications have learned on the job. What’s more, 32% of business owners believe that the role isn’t complicated enough to need qualifications. In addition, 14% say the business can’t afford to hire a qualified person and one in 10 says it’s too expensive to train them.

Mark Farrar, AAT chief executive, said: “What’s worrying is that many business owners think that finance and accounting for their business isn’t complex enough to need a qualification, and that whoever looks after it can just learn on the job. The fact that businesses are losing money through accounting mistakes shows that this isn’t the case.”

Related resources:

• Four common misconceptions small businesses have about accounting and tax BLOG
• Tax is taxing, but here's your starter for ten BLOG
• The seven deadly sins of bookkeeping BLOG