Despite the importance of running a financially sound operation, not all business owners know the ins and outs of their company's finances, new research shows.
A study by Staples discovered that although more than 90 percent of small business owners are confident in their ability to manage their finances, less than half are able to define basic accounting principles, such as "accounts receivable " and "accounts payable ."
"A firm understanding of finances and business performance is crucial for a small business to be successful," said Steve Strauss, president of TheSelfEmployed.com. "Managing finances is a challenging process and many business owners are often unaware of the tools and resources available that can help them make smart decisions and, ultimately, improve their bottom line."
Overall, a number of small business owners are loosing sleep over their financial status. Close to 30 percent of those surveyed acknowledge financial and cash flow challenges, which include having to postpone hiring, while 32 percent say they often feel as if they are "drowning in receipts."
To help with some of their cash flow problems, 65 percent of small business owners admit to having some spare funds close by. Among the most popular hiding places for entrepreneurs' emergency money include a desk drawer, in a pocket and in the car.
To help small businesses through difficult financial situations, Staples created the Business Hub as a way to offer tips and advice from industry experts, as well as provide access to tools that may help them meet their business challenges.
"Small business owners want help with managing expenses and Staples provides the expertise on our Business Hub and through our Succeed small business community on LinkedIn," said Alison Corcoran, senior vice president of stores and online Marketing for Staples.
The study was based on surveys of 500 U.S. small business owners.
Originally published on BusinessNewsDaily.