New research by business management platform Xero reveals that South African small businesses are making mistakes costing them an average of R91,311 per year due to a lack of financial knowledge.
New research reveals that South African small businesses are making mistakes costing them an average of R91,311 per year due to a lack of financial knowledge. This rises to R136,205 for businesses with 10-49 employees, demonstrating that more support is needed to close the financial literacy gap.
The findings are based on a survey of 400 entrepreneurs conducted by global small business platform Xero. The research discovered that the four most expensive mistakes businesses made over the last 12 months were:● Not knowing about or not using appropriate government support schemes Four-fifths of small business owners are calling for greater advice and support to help avoid mistakes in future.
Colin Timmis, country manager for Xero South Africa, said: “Financial literacy is the backbone of any small business. Having a clear view of cash flow and what money is coming in and out is the only way to make informed decisions. Small businesses simply can’t afford to make mistakes. “We need to see a greater focus on financial skills development and more collaboration between government and the technology sector to educate owners on the tools available to them.”More than a quarter of small business respondents said submitting tax returns is one of the top areas they struggle with. Meanwhile, 41% said they wish their interactions with the South African Revenue Service could be more efficient.
“We know that boosting the taxpayer base is one of the most important drivers of our economy. Yet, many small businesses still don’t have the support they need to file them confidently,” said Timmis.The pandemic has put into perspective the importance of financial literacy. Almost all respondents said it had changed their approach to finances, while more than half said they wanted to learn more about managing money as a result.
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