MobiKwik Payment Gateway: How to Overcome Five Accounting Challenges Faced by SMEs

SMEs face similar accounting challenges as large enterprises. However, unlike large enterprises, SMEs lack the financial resources to outsource professional services. As a result, bookkeeping and accounting are usually managed in-house by SMEs. This leads to a number of challenges for small enterprises in dealing with accounting processes.

The following are the main accounting issues faced by SMEs and provide some suggestions to ensure accurate recording of company finances.

Accounts receivable/collection issues

Maintaining an accounts receivable or collection process is the number one accounting issue facing small and medium-sized businesses. However, by accepting electronic payments, you can overcome this challenge. E-payments are easy to use, less expensive and help accelerate cash receipts.

Cash flow management

SMEs must balance their cash flow to cope with prepaid expenses. It is recommended that you consider other sources of capital to manage large purchases. By spreading out your expense approach, you can build up a cash reserve. Use a system such as Dropbox or Google Drive to keep a cash flow spreadsheet in the cloud to view at any time.

Document management

Immediately file documents into your system from the moment you pay a bill or process a paper document. This will help you streamline your accounting process.

Monthly closing of accounts

For SME owners who have difficulty managing their accounting books or dealing with tax issues, it is advisable to hire a professional tax advisor or accountant. Failure to close the books correctly can lead to severe cash shortages, a situation that can quickly lead to business closure.

Wage management

Establish a second account for employee payroll only. This will ensure that payroll funds are separated from general operating funds.

For more, read To-Do Lists for Online Business Setups. Stay tuned to the PayU Knowledge Platform for more insights and case studies.