How Accounting Challenges Impact the Mental health of SME Owners

Psychological stress is a highly prevalent health problem among small business owners in Australia. Beyond Blue – a renowned mental health organization in the country reveals that one in three small business owners suffer from anxiety, with one of the leading causes of anxiety being cash flow.

Accountant in Ryde


1.       Stress & Anxiety

Small business owners wear many hats and quite often due to limited resources, they need to manage every aspect of the business. While business owners are busy with day to day operational activities, they tend to neglect their accounting and finance functions. Quite often they don’t have the financial expertise to manage accounting tasks. This causes a lot of uncertainty in their decision making and this eventually leads to a high level of work stress and anxiety.

Business owners lose the pulse on their numbers and are unable able to review the key performance indicators of their business. As your local accountant in Ryde and greater Sydney, we help business owners deal with this stress and anxiety by taking over their accounting functions. We provide them financial expertise, monthly reports, coaching, and cost minimization strategies which ultimately lead to better profit margins.

We do a complete health check of your financials assess the strength of your internal controls and check the reliability of your accounting data. We provide proactive advice to business owners which takes the stress and anxiety out of their life.

2.       Cash flow issues – The number one factor keeping SME owners awake in the night

Among the main causes of business failure and mental stress is cash flow. Business owners make the mistake of assuming that cash is easily managed and that if they can keep their business profitable on paper the business will be successful.

 Business owners do not take into account that cash payments from clients are important because this cash will be used to pay for immediate expenses, procurement of materials, settlement of outstanding debts, and for unforeseen costs. While each of the expenses and costs might be immaterial on their own, collectively, the scarcity of cash can have significant consequences for a firm’s survival. 

As your local accountant in Ryde and greater Sydney, we specialize in cash flow management. We sit with business owners and go through the entire Profit & Loss, identify the variable and fixed expenses, seasonality of cash, important trends, upcoming commitments, and what strategies need to be in place to achieve business goals.

 

3.       One man show – Burn Out

Owning a business and managing its operations can be a trying task, especially when owners believe that they can single-handedly manage everything from marketing to production and accounting. Trying to do too many things inevitably leads to failure, where not being able to manage everything effectively leads to burnout. Running the business and also handling accounting can prove to be too much for a single person.

We can train your accounting staff so that they can take on greater responsibility and help free up more time from business owners. You can also completely outsource your accounting function to us so that you have one less thing on your plate.

 

4.       No time for Family and Friends

Time and tide wait for no man – an adage that makes more sense now than ever as over-working is being glorified with family and friends being a casualty to the phenomenon. However, working long hours is not necessarily synonymous with being productive. Staying away from family and friends can have a long-term psychological effect on business owners and can adversely impact relationships.

 Hiring the right people to help with business functions such as accounting can prove to be a great personal and business investment in the long-run.

5.       Lack of future financial visibility

Business owners have many tasks taking up their time. Monthly reporting is essential to keep the business on track and to make sure that the goals are being achieved, one milestone to the next. Absence of monthly financial reports obliterates any chances at having financial visibility because it means that business owners don’t know how they are progressing; they don’t know what their business will achieve in the next quarter, and whether they have improved or deteriorated in terms of their performance as compared to the past.

This lack of monthly reporting means that there are no budgets or forecasts that can help business owners make decisions, leading to stress and anxiety regarding the future of the business. We can take this lack of future financial visibility and provide you with monthly management reporting, KPI analysis and also provide you with a rolling 12 months forecasts.

6.       Impact of COVID-19 on Businesses.

COVID-19 has created a host of challenges, with business owners being at the heart of it – lockdowns having forced many businesses into bankruptcy. While the government has put in place schemes that can help small businesses through the hardship, business owners, with their tremendous levels of stress have been unable to keep updated.

The ATO provided a large number of grants, waivers, payment deferments, financial counseling, etc. to help businesses suffering from the impact of this pandemic. These schemes were quite complex in nature and needed a thorough understanding of the eligibility. A lot of small business owners failed to take advantage of these schemes due to not being able to understand the eligibility criteria.

As your local accountant in Ryde and greater Sydney, we can help small businesses get access to these grants, evaluating eligibility, and preparing the required financial documents that can help secure these grants.

When work is carried out by a single, already burdened business owner, the owner tends to falter in his tasks. The business’s inefficiency leads to further resource constraints, making it even more difficult to hire talented staff. The cycle carries on creating anxiety for the business owner as a result. Therefore, it is important to hire the right people and delegate tasks to them. This might appear costly in the short run but can be fruitful for the firm’s future.

Disclaimer: This is generic Information & post; content about the services can be changed from time to time as per your requirements and contract. To get the latest and updated information, contact us today or visit our website.

Location: Ryde NSW 2112, Australia

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