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Open University Study

The Open University published a report this month into how UK SMEs use management accounting to improve their performance. Key conclusions were that: – “There is a tendency to make decisions without adequate, or indeed any, financial information or analysis” – “SMEs are often failing to leverage adequately the potential of management accounting for helping them achieve their financial objectives, including profitability and liquidity” – “There is considerable scope for improvement through.. and improved understanding/awareness of management decision support tools” – “… while not using certain management accounting tools may be appropriate for small organisations, it will not be appropriate when the organization grows in size” The study looked at a series of small and medium sized UK companies covering a wide variety of industry sectors and accords very much with Alpha Financials’ thinking on the opportunities available to SMEs to improve their financial performance.