According to the Corporate Finance Institute (CFI), SMEs make up the majority of the businesses operating around the world. Generally, they are independent firms with less than 50 employees. However, the maximum number of employees is different from one country to the next. For most companies, the upper range sits around 250. Some countries dock the total number of employees at 200. The United States defines an SME, among other characteristics, as those with no more than 500 workers.
According to the World Bank, SMEs account for the majority of businesses worldwide and are important contributors to job creation and global economic development. They represent about 90% of businesses and more than 50% of employment worldwide. Formal SMEs contribute up to 40% of national income (GDP) in emerging economies. These numbers are significantly higher when informal SMEs are included. According to Word Bank estimation, 600 million jobs will be needed by 2030 to absorb the growing global workforce, which makes SME development a high priority for many governments around the world.
The above postulated facts by both the CFI and World bank have shown the importance of SMEs not only to the developed economies, its importance to emerging economies around the world cant be underemphasised. SMEs are very important to the growth of our every economy, a great contributor to our IGR and GDP as well as a huge employer of labor.
Despite the huge contribution of this emerging SMEs to our world today, a lot of mistakes have let to the death of a lot of once bubbling economically viable SMEs, a lot of mistakes they termed little were overlooked which still being overlooked till date is serving as catalyst to the closure of SMEs globally. There a lot of factors for the failures of many SMEs around the world and most of the times it doesn't have to do with lack of competence on the sides of employees or employer but as a result of lackadaisical nonchalant attitudes of both owners and staffs. Thete are many mistakes that has led to the failure of a lot of SMEs, nevertheless we will divulge into some that has been a major catalyst to the failures of this many establishments.
Book Keeping as easy as it may sound is one of the major reason why a lot of SMEs are folding up. Bookkeeping is the process of recording your company's financial transactions into organized accounts on a daily basis. It is the day to day record of a business enterprise. While it may not be the most glamorous job, maintaining accurate financials is crucial to small business success. Generally, owners often make bookkeeping mistakes in their business's early stages, primarily due to the lack of knowledge and experience. While this does not look like a huge problem at first, being aware of the mistakes can go a log way in mitigating against lose. Below are few mistakes of Bookkeeping SMEs owners do commit;
I. Disposing Receipts of Tiny Amount- An major disasters being committed by Owners of SMEs is trashing of Receipts of little amounts, this Receipts are very important when it comes to reconciliation of different accounts. it's better to be safe than sorry, it is better to keep those receipt in a safe place as it will be of great help when reconciliating different accounts.
II. Personal Handling of Bookkeeping - A lot of Owners tends to fall a victim of this huge big mistakes at the initial stage of starting a business. It is imperative to know ans understands that every components and part of accounting is sacrosanct to the survival of an establishment thus it is important to employ the service of an accountant to handle this delicate but important operations
III. Merging Personal and Business Finances together- With many small business owners managing their books by themselves, they often mix personal and business finances. This is a complex disadvantage situation and detrimental to the financial health of the business because business owners won't be able to know the real status of the financial state of the organisation.
IV. Negligence of not Reviewing Books- As it is important to hire a book keeper, so it is very important to always do a constant review of Book of accounts. A lot of business owners enthroned in totality the control of Bookkeeping to their Book keeper. This is a huge and can lead to the downfall of a business.
V. Lack of Proper Classification of Employees- With so many independent contractors, consultants, and freelancers around these days, it can sometimes be difficult to determine who is a company staff and who is not. Misclassifying employees and contractors can have significant consequences, including tax penalties and lawsuits.
VI. Improper Deduction and Collection of Taxes- Due to the explosion of eCommerce over the last 10 years, sales tax has become a complex issue for many small businesses. Historically, the mistake they most often made was simply failing to deduct sales tax from total sales, which would translate into lump-sum surprises come tax time. To avoid unnecessary mistakes or even court cases in some cases, bookkeeper must be familiar with the latest rule changes, so you can remain in compliance and limit your overall tax liability.

Employing the service of a professional book keeper may seem like an extra expense. Still, a fulfilled and well balanced book of account will end up being to your advantage in the long run, as well as a major determinant of the survival of the business.
Good luck!

Oyeniyi Abiodun Samson