By Daniel Hunter

Small businesses in the UK are being held back by the banks and must learn valuable lessons from Germany’s success, according to a survey of Chartered Global Management Accountant (CGMA) professionals by the Chartered Institute of Management Accountants (CIMA).

The survey of 171 finance leaders identified that an emphasis on private ownership and focus on the long-term, and job creation and the retention of skilled workers, are the main factors behind the success of the German Mittelstand that must be adopted in the UK. [Interestingly, these are the key ingredients behind the John Lewis Partnership success story].

Asset-based lending is the most common form of alternative funding, with 19% of respondents using it. Over half (52%) have concerns that so-called ‘zombie’ companies are partly responsible for holding back the development of the SME sector in the UK.

"In challenging economic times, it is absolutely vital that entrepreneurs and small businesses make full use of their finance people. They must look past the traditional view of accountants as 'bean counters' and understand their value as business partners," David Rowsby, Regional Director — Europe, CIMA said.

"Recent CIMA research with the Open University and Nottingham Trent University shows that there is a tendency for SMEs to make decisions without adequate financial information or analysis. Time and opportunities are also being wasted because some owner-managers don't want anyone else to know their business.

"Given current financial constraints, and the increasing need for organisations to operate efficiently, effectively and ethically, management accounting has a crucial role to play in improving the quality of planning, control and decision-making.

“CGMA professionals understand how the different parts of a business need to come together. They combine financial expertise with business acumen and can guide the critical decisions that will drive sustainable business success."

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