The UK economy remains in a period of slow growth. So, it is no surprise that many SMEs are looking to grow abroad. However, challenges outside the macroeconomic environment are holding them back. Immy Spence, Head of SME Growth at Airwallex, outlines how progressive businesses have an opportunity to turn these challenges into competitive advantages by focusing on three core areas.
With the UK economy remaining in a period of slow growth, small business confidence has become ‘very pessimistic’, so it’s no surprise that over half of SMEs are eyeing the shores for growth over the next 12 months. However, challenges outside the macroeconomic environment are holding them back, namely managing and having visibility over global spend.
As 90% of finance leaders are dissatisfied with their current systems – believing them to be inefficient and unreliable – there is a clear disconnect between spend management and the strategic direction of companies. This frustration comes from a lack of control, visibility and automation – issues often compounded by fragmented systems hindering business growth. The reality is that finance leaders in small businesses face significant hurdles in effectively managing their spending, and these must be addressed before they can truly unlock growth.
The adage ‘time is money’ is especially true for small businesses. Managing budgets and transactions across different regions can eat into their time and resources, especially when the processes are increasingly fraught with complexity. However, it’s not all doom and gloom – once finance leaders recognise the challenges traditional processes pose towards effective spend management and make a change, they can turn it into a competitive advantage.
Out with the old and in with the new tools
Small businesses in the UK seeking global growth cannot afford to be hamstrung by these inefficiencies in spend management, and 98% of finance leaders know this adversely affects their operations. Without any solid controls on spend, there is a real risk that a business overextends its spending and encounters budgetary issues which damage the overall health of companies.
Archaic tools and processes may seem familiar and reassuring, but 97% of businesses note a lack of real-time visibility into their spending patterns, as the often disjointed tools obscure a clear view of their finances. The reality is that traditional methods of spend management cannot keep up with the complexities of currency fluctuations, regulations and cross-border payments.
At the same time, embracing a new, modern system can feel daunting – we know that 32% of businesses feel overwhelmed by the sheer volume of software tools available. However, creating a unified spend management system is key for finance leaders looking to regain control.
Embracing automation
Automation plays a crucial role in streamlining these operations, reducing manual tasks and minimising the potential for human error. While many small business leaders recognise the value of automation to stay competitive, UK businesses still heavily rely on manual processes which hinder them. Ninety-six percent report feeling the impact of insufficient automation, with 33% saying it impacts their business due to wasted time on repetitive tasks like manual data entry and reconciliation.
Manual options may tempt smaller businesses looking to cut costs, but in the long-term, they can lead to inefficiencies that hamper the bottom line. For this reason, finance leaders should seriously consider pivoting to automating spend management processes.
The key to freeing up time for finance teams lies in automating the entire spend lifecycle, from invoicing and bill payments to expense submissions and accounting system integration. This can be achieved by combining software and financial infrastructure into a single, unified platform, allowing small businesses to focus on global expansion rather than routine tasks.
Improving reporting across regions
Accurate financial reporting is what underpins the success of small businesses operating on a global scale. The UK’s proximity to European markets offers opportunities, but nearly half (47%) of UK finance leaders lack confidence in their financial reporting accuracy across regions, creating problems for conducting business across borders.
For a small business, a disjointed picture of finances further complicates global operations. Any potential blindspots could create compliance problems, difficulties in forecasting cash flow and even result in missed growth opportunities for the business.
To increase real-time visibility and accurate reporting, companies should adopt platforms with built-in automation and scalability. Similar to spend controls, this requires having unified spend management systems.
Managing spend and reporting may feel like a mountain for small business finance teams to climb, but for those wanting to achieve global success, unifying spend management into one platform is the ultimate solution. Removing the friction, errors and a lack of financial visibility from multiple systems is the only way small businesses can make better decisions and position themselves for global growth.