Many entrepreneurs are not equipped with financial management skills and knowledge needed to make informed and effective decisions about their financial resources, according to a new report.

The new guide titled ‘Financial management and business success - a guide for entrepreneurs’ released by ACCA (the Association of Chartered Certified Accountants) is designed to help small businesses understand the importance of financial literacy and guide them through the basic elements.

It’s reported that up to 36 per cent of business failures are caused by inadequate financial management (Turnaround Management Society, 2014). Understanding financial information is vital for offsetting this risk as it reveals the early warning signs of impeding problems.

The guide stresses the importance of business planning at every stage of business life, helping to assess and identify opportunities directly, and avoid mistakes through applying correct financial knowledge.

Featuring quotes, case studies and statistics that support skilled financial management, the ACCA guide demonstrates how to make sure individuals have the financial capabilities needed to ensure their organisation achieves its full potential.

Lindsay Degouve de Nuncques, head of ACCA Middle East said: “UAE’s small business sector has long been acknowledged as crucial to our overall economic performance. The success of entrepreneurs and SMEs is very important as they account for more than 60 per cent of the UAE’s GDP, according to the Ministry of Economy.”

“Recognising the right financial management capabilities is therefore imperative to their success. Having the right financial capabilities remains vital throughout the life of a business, whether you are just starting out, have an established business or are looking towards a final exit from a firm. Businesses are changing and innovating more rapidly than ever and the financial management needs of organisations must continue to evolve alongside their developments,” she added.

ACCA is the global body for professional accountants. It offers business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. – TradeArabia News Service