Owners want more financial planning help

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Over two-thirds of Canadian small business owners say they need to know more about financial planning, according to a new survey from Sage, a provider of management software.

Coinciding with financial literacy month, the survey asked 300 Canadian small business owners to determine “financial literacy,” by gauging the overall perceptions, knowledge and habits of  small business owners with regard to financial management, resources and compliance.

Read: Newer businesses need to focus on key issues

Small businesses recognize the need to know more about financial planning (67%), tax payments (65%) and cash flow (58%). They cited employee compensation (22%) is one of the top three costs with the largest impact on their businesses. Marketing and advertising (12%) and capital expenditures (12%) are the other two.

Read: Small businesses unwilling to cut wages and benefits, survey

The survey also found that small business owners are relying on mobile technology to manage business-related activities. Respondents reported using their mobile devices to handle emails (52%), online banking (30%) and managing their calendar (25%).

However, Quebec small businesses are the least likely to use their device for business email communication, with only 38% using mobile technology to do it. The devices most used are laptops (67%) and smartphones (58%), while only 18% of respondents use tablets for business purposes.

Read: Advisor profile: Clients need business plan support

Other highlights of the financial literacy survey include:

  • The most impactful cost for Alberta businesses is capital expenditures (31%).
  • 49% of respondents reported cash flow as the most important aspect of the financial management of their business, followed by invoicing (47%) and managing costs (35%).
  • The majority of respondents said they perform their business’ financial management tasks themselves, including invoicing (78%), payroll (58%), inventory management (55%) and accounting (52%). Accounting, followed by payroll, is the financial task most likely to be outsourced (34% and 9%).
  • An overwhelming majority of respondents (71%) rely on accountants or consultants for advice, followed by government information (31%) and other people in the same industry (30%).
  • When it comes to learning to manage business finances, 73% of respondents are self-taught; 41% learned from an accountant, a consultant or a bookkeeper; 29% received formal full-time education. Quebec business owners are less likely to have learned from a professional (29%).
  • Small business owners who use accounting software are more likely to be more financially literate than those who do not (90% versus 72%).

Read: Smaller businesses struggle to identify key costs, survey

Transcontinental Media G.P.