A new report from Commonwealth Bank suggests small and medium-sized businesses (SMBs) in Australia are struggling to make use of the financial data at hand.
Reports Monday (Sept. 15) noted that 54 percent of small business owners don’t feel their efforts in financial planning and forecasting are effective and living up to their potential, with one-quarter noting they do not have the ability to see if their planning efforts were effective.
Most (54 percent) told Commonwealth Bank they have limited understanding of their financial performance and how it progressed year-over-year, and 74 percent admitted they were unsure of how their finances stacked up against competitors.
Commonwealth Bank surmised that as many as three-quarters of small businesses in Australia are “in the dark” about their finances.
“Having an intimate understanding of financial performance, the industry in which you operate and about customers needs and preferences can really set a business apart in a competitive marketplace,” said Claire Roberts, Commonwealth Bank’s SME business banking executive general manager, in a statement. “Small businesses, in particular, are usually time poor, and not all have the right tools to support effective business planning.”
The survey also found that while small businesses understand financial data is important to their ability to forecast and track performance, SMB owners may not be adequately making use of the information.
Overall, 47 percent of businesses surveyed said they are experiencing “moderate-to-high” stress when it comes to financial and revenue performance, with 41 percent reporting the same about their ability to source growth opportunities.
Forty-one percent added they are experiencing moderate-to-high stress regarding cash flow management. Commonwealth Bank’s report also found high levels of stress when it comes to revenue, growth and competition, according to the article, but noted the survey suggests small businesses aren’t sure of exactly how much they should be stressing over these factors.