Cost Accountants and SME Relation

Well I am not going to start my article of today with giving a long background about the potentiality of the Small and Medium enterprise for an economy. Rather I have found that SME now stands to be survival agents for the Economic crisis across the globe. In my research I have found that the recent slowdown and turbulent economic conditions of the Europe and US economic growth needs more growth and entrants of Small and Medium enterprise into the country. Innovation and entrepreneurship are the demand of the situation and hence we need more SME to come ahead to pick up the employability and bring innovation live into the system. We cannot find growth from traditional companies and process in Europe and US economy. We need SME to grow and equally government of these economies needs to promote and help the growth of the SME segment.

Small and Medium enterprise needs better cost management strategies which would help them to negate the constraints of growth. In my research I have found that SME needs better management of keeping and maintaining books of accounts. Rather I would place it in this way that they need to maintain high quality of financial papers. As SMEs grow, it is possible that new clients or new suppliers will scrutinize the firm’s financial position. Sound financial statements and balanced funding will help reassure prospective business partners. It’s more important than having sound financial papers.

Whiling coming to the path of cost management I find the needs easy and lucid strategies of growth and survival. In fact survival strategies are more required in the initial phase rather than growth. Cost management is the vital path to survival for an SME. Application of activity based cost management and flexible budget are the most widely best strategies. Both these tools keeps an check and control over the cost.

Another most important aspect I came across is the human resources management policies of the SME. They have to be very critical and very strong enough to support the long term vision and mission of the SME unit. Now many of friend might argue that it is not possible for an SME to have an high paid human resource. This is the place where we go wrong. It is not the question about high paid human resources but the picking up of the resources linking with the vision and mission of the SME unit in the short as well as in the long term. Well one must not forget that human resources are the biggest capital and its proves well when incase of SME. High level of attrition could damage the growth and stability of the SME segment. Hence HR policies of an SME unit needs to be very strong enough and should not be taken as an easy process.

Technology on the other side has taken a huge rollover particularly for the SME. Over here I have noticed that often SME invest majority of their capital into Technology with this idea that it would help them to reduce cost over the time. Since majority of them think that initial cost of the technology is fixed cost and this would get depleted over the years. But we fall into the trap of huge investments which might not work with the perception of taking and developing the technology. We have found a handful of companies falling under this trap. The best way is to take up simple technology in the initial days and design the technology with the progress of the unit. This gives an enough space for the SME unit to invest and strategies its investments into technology and various other aspects of the business without creating a dead lock. Moreover I have found that the growth of software-as-a-service models is also bringing sophisticated management information systems within reach of SMEs. This is another key area where the SME needs to focus with the scalability of the business. Process like big data management needs to be implemented with the scalability of the SME unit. This is often found to be missing even in the initial stage of the SME business. We must remember that efficient client servicing is the key for the SME to grow and sustain. Hence MIS and Big data management needs to be adopted and implemented within the system from the initial days of the SME business process.

Moreover the process management should be excellent enough to support the standards of the market. This is a key area for the SME segment in the short term as well as in the long term. In my research I have found that it is beyond sound process management. I find cost accountants who are in the segment of internal audit can be utilized or designing the management process of an SME. Cost Accountants hold diverse knowledge about various industries and its cost aspects hence I find that they should be placed as an consultant by the SME segment. In my research I have found that often SME gets big projects based upon their strength of the process management of the SME segment. Hence process management and efficient process flow chart are mandatory for the SME segment. Expert advice is necessary at every step of and SME segment to grow and sustain the business growth over the period.