25% of small businesses are still tracking finances by hand
- A quarter of small businesses still use paper and pencils to do their accounting, according to a new survey by Clutch, a business-to-business research, ratings and reviews company. Slightly more than half of small businesses use an accounting software to manage their finances.
- The survey also found that 72% of small businesses roll the HR and accounting functions into one job for one employee to manage. Survey results also showed that nearly half (45%) of small businesses don't have a dedicated accountant or bookkeeper.
- "HR, just like accounting, is a specialized field," Basis 365 Accounting Co-Founder Rhett Molitor said in the press release. "If you try to wing it, you're probably going to get burned. In most cases, the law is going to favor the employee."
Assigning non-HR professionals to carry out HR functions is a risky proposition. As Molitor pointed out, employees who aren't trained in employment laws, compliance measures and human capital management could put their organizations in legal jeopardy. Federal, state and local governments have laws and regulations that require the knowledge, skills and expertise of a dedicated HR practitioner. Businesses get into legal trouble almost every day when leaders don't follow the rules: they create illegal leave policies; they fire employees without lawful cause; they pass over qualified candidates for illegal reasons. But if they don't know the rules, they can't follow them. That's why employees with power need training, and plenty of it.
Just as they have revolutionized the accounting department, digital tools have freed up HR professionals from time-consuming administrative tasks so they can focus on recruiting, hiring, compensation and benefits administration, compliance and other more critical functions reflective of their expertise. Small businesses are sometimes short-staffed and operating on small budgets; therefore, they often hire one person to do a variety of tasks. But technology allows companies to streamline or outsource functions efficiently and, in most cases, cost-effectively, with far fewer errors.