SMEs often believe that adopting tools like Xero or QuickBooks turns finance into strategy, put simply, it doesn’t. Automation helps with admin, but it doesn’t replace insight. Real strategic decisions require financial fluency, not just dashboards.
This article is by Martin Spiller, who is a serial entrepreneur and investor.
Most SMEs lack the in-house capability to interpret the numbers and connect them to real decisions and the finance profession is not really helping, often hiding behind jargon and complexity. It’s time to stop pretending that tidy reports equal commercial thinking. Automation is useful, but without financial understanding, it’s just faster bookkeeping.
I have been a CFO for a lot longer than I want to admit, as well as a senior lecturer responsible for teaching executive education to over 600 SME businesses in the last 4 years and, to put it mildly, there is a widespread collective weakness around business finance. Many either outsource the responsibility to a bookkeeper, accountant or firm or seem to think that Xero or QuickBooks (other cloud-based solutions are available), along with clever apps that they add-on, make them “strategic”.
The bad news is that a linked bank or bank accounts along with a slick dashboard does not mean you are financially sharp, indeed often quite the reverse as SMEs have an undue focus on revenue and profit when perhaps they should be looking wider elsewhere for the critical factors which drive their business.
Let’s be honest, what these tools provide is automation of the mechanics such as invoicing, reconciliations, VAT returns and perhaps some basic reporting. This is really important, saving lots of time, reducing admin and making life a lot easier and cheaper for SMEs. But, what they don’t do, is make you or your business financially intelligent. After all, they don’t answer real questions:
• Can we afford to hire?
• Why are we running out of cash despite being “profitable”?
• Should we raise prices?
• What’s driving our margin erosion?
• Are we funding growth or fuelling a slow-motion collapse?
For that, you really need to have a higher level of financial fluency, and in my experience, this is where most SMEs struggle, with thinking, not the tools.
Financial software doesn’t do strategy
The hard truth for many founders to swallow is that you can’t outsource judgement to software as no app is going to tell you whether launching a second location makes sense, or whether you’re dangerously exposed to one major client.
The tools will show you numbers, they will automate processes, but they won’t analyse and interpret them as they can’t identify the reasons for a falling gross margin or tell you why your pricing model is wrong.
They’ll present the data, but even then you need to understand how the data is made up as the dark side of automation is that if it is not set up properly or reviewed regularly, it will replicate mistakes over and over again. Either way, someone still has to understand it, ask the right questions and turn it into action. And for me, this is where the real gap lies.
Lack of financial fluency
In most SMEs, nobody owns the strategic finance conversation. Founders are often brilliant at sales, product or delivery, but most will say that they were rubbish at maths at school and feel uncomfortable with finance and believe it’s complex, coded, or only for specialists.
So, often we find a bookkeeper doing the basics, an accountant dealing with the statutory stuff and nobody bridging the gap between “the numbers” and the decisions the business needs to make. This isn’t about blame, it’s about recognising a structural blind spot and too often, the finance profession has reinforced that, potentially out of self-interest.
Finance professionals haven’t helped
As a profession, we’ve made strategic finance feel inaccessible. We’ve wrapped it in jargon, hidden behind acronyms and made it feel like a members-only club where you need a degree and a spreadsheet fetish to join. As a result, founders and operators, often brilliant in every other aspect, are left thinking finance is not for them, something to be handed off and best avoided. Sadly, that mindset is costing businesses real money through poor decisions, missed opportunities, all because nobody in the room was comfortable enough to ask, “Hang on, what will this mean financially?”
It doesn’t need to be this way
Finance isn’t magic, and as someone who got a B at GCSE Maths, I can say it’s anything but mystical. However, as the great Warren Buffett espouses, it is the language of business that explains and shows how it all works.
Founders must, therefore, learn how to speak it, so they can understand the drivers of their business and the impact of their decisions in a clear and simple fashion without the hype or the hustle that so often surrounds them. This doesn’t mean every founder needs to become a part-time CFO, but they do need to get fluent enough to:
• Ask smart questions
• Spot red flags
• Understand trade-offs
• Make decisions with financial consequences in mind
Without this, even the best software in the world coupled with AI and all its benefits, will not be able to translate it sufficiently for you to make well-informed decisions.
What SMEs actually need
I want to be clear, I am not anti-software, I am currently upskilling myself on all things AI. Indeed, I think automation plays a key role in modernising finance, enabling time for clear thinking by automating the boring admin. However, someone still has to do the thinking, otherwise, you’re just creating faster bookkeeping and not a better business.
If you’re serious about growth, the focus needs to be less on apps and more on upskilling, so you speak the language of finance rather than fearing it.
Within that, we must demystify finance, making it more inclusive, practical and commercially useful.
It needs to be more part of the day-to-day conversation, demonstrating the link between data and decisions, rather than just being tick-box reports and compliance. Because the risk isn’t just a missed opportunity, it’s bad decisions made confidently, because no one knew what to ask.
Final thought
SMEs don’t need more dashboards, they need more understanding. They don’t need to become CFOs, but they do need to know enough to ask, “What does this actually mean for us?” Automation helps with the inputs but if founders want real business growth, not just noise, finance must be something that supports decision-making, not just record-keeping. And that starts by making it understandable, usable, and human.
PS I work with founders, scale-ups and boards that value honest, experienced advice with real commercial impact. No fluff, no hype, just clarity and direction, as one friend said I call a spade a shovel (with a few expletives) and this is a description of which I was pretty proud….