SOURCE: Sage North America

Sage North America

October 23, 2009 06:00 ET

Nearly a Quarter of Canadian Small Businesses Admit They Are Unable to Identify Key Costs That They Need to Manage for Success: Survey

Angus Reid-Sage Survey Reveals 'Financial Literacy' Levels of Small Businesses

MONTREAL--(Marketwire - October 23, 2009) - Simply Partnership -- Nearly one-fourth of Canadian small businesses polled admit they are unable to identify the most important costs that they need to manage in order to succeed, according to a new survey on 'financial literacy' conducted for Sage North America by Angus Reid Strategies. The survey was designed to examine the financial state of small businesses by focusing on their level of 'financial literacy,' as defined by how finances are managed, business owners' comfort level with financial management, where financial information is obtained and how businesses are managing compliance with government requirements.

"The importance for small businesses to identify and manage costs that are key to the organization's survival and success cannot be overestimated, particularly in the current economic environment, where decisions can have a significant impact on the bottom line," said Jamie Sutherland, vice president and general manager, Simply Accounting. "Our main focus today at Simply Partnership 2009 is to educate and inform our partners on the advantages our products offer in this important area so they can help their clients be more comfortable with financial data and processes."

The 17-question small business survey conducted by Angus Reid Strategies in October, 2009 showed that among 503 participants, 22% said they could not identify the "most important cost" that their business currently needs to manage. Various costs identified in the survey included capital expenditures, employee compensation, contracts and leases, advertising and marketing, inventory, travel, computer hardware and software and employee benefits.

Other highlights of the Angus Reid-Sage small business survey include:

--  Small business owners that have fewer employees or are newer
    organizations tend to be less financially literate. They are more likely to
    be located in Quebec and to some extent the Atlantic provinces;
--  Two thirds of small business owners surveyed said they have been
    negatively affected by the recent economic downturn, with 14% calling the
    negative impact 'dramatic.' Small business owners in Ontario were more
    likely (18%) to have been dramatically affected. The most positive
    responses came in Quebec, where 29% of small business owners said they have
    not been negatively affected and 9% reported growth;
--  The most commonly outsourced service today is accounting, as cited by
    39% of businesses, while payroll is done in-house by 48% of business
    owners, and invoicing and billing are performed by 78% of businesses
    themselves;
--  As companies grow in size, they are more likely to delegate financial
    management tasks to employees. The most commonly delegated task in
    companies of six or more employees is invoicing and billing (59%), followed
    by payroll (44%), inventory management (41%) and accounting (33%);
--  More than half (51%) of small business owners identified cash flow as
    one of the two most important aspects of financial management that are
    crucial to businesses' success. Other important aspects are invoicing and
    billing (44%), managing costs (36%), financial planning and forecasting
    (20%), tax payments (16%), inventory management (6%), payroll (4%) and
    EI/CPP compliance (1%);
--  Small business owners rely on diverse sources for advice on managing
    finances. The most common resource is an accountant or consultant, relied
    on by 65% of businesses, followed by the Internet (38%), contacts in the
    same industry (32%), government information (29%), friends and family
    (24%), books (21%), business or industry association (15%), mentors or
    former employers (14%), employees (4%) and business education services
    (4%);
--  On the question of compliance with government rules and regulations,
    business owners were most concerned about taxes, with 38% citing income
    taxes as their key concern, while 16% cited sales taxes.
    

The survey was conducted from Oct. 2 to Oct. 7, 2009 and the majority of respondents (58%) were the only employee of the business surveyed. Results have a margin of error of plus or minus 4.4%, 19 times out of 20.

About Simply Partnership 2009

Simply Accounting is the #1 choice of Canadian small businesses and accountants*, with more than 500,000 registered users in Canada today. The Simply Partnership 2009 conference being held Oct. 23, 2009 in Montreal will offer members of the Sage Accountant's Network (SAN) a special opportunity to exchange ideas and perspectives with Sage insiders, session leaders and industry experts. Participants will learn innovative strategies designed to help small business owners become more productive, profitable and successful. Complete details on this special Sage event are available at www.simplypartnership.com.

About Sage North America

Sage North America is part of The Sage Group plc, a leading global supplier of business management software and services. Sage North America employs more than 4,100 people and supports nearly 2.9 million small and medium-size business customers. The Sage Group plc, formed in 1981, was floated on the London Stock Exchange in 1989 and now employs 14,500 people and supports 5.8 million customers worldwide. For more information, please visit www.sagenorthamerica.com.

*Based on independent surveys of 312 Canadian businesses with 1-99 employees and 482 accountants who work with small business clients, conducted in Canada in Sept 2009.

©2009 Sage Software Canada, Ltd. Sage, the Sage logo, and the Sage product and service names mentioned herein are registered trademarks or trademarks of Sage Software Canada, Ltd. or its affiliated entities. All other trademarks are the property of their respective owners.

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