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- SMEs is the short for small to medium-scale enterprises.
- The volume of capital invested in a business determines its expansion.
- SMEs are characterized by low staff strength, small office spaces, low startup capital and profits.
- There are over 32.5 million small businesses in the US.
- Invoicing helps SMEs to measure patronage.
- The invoicing option to be used by an SME should be dependent on the mode of business.
- SMEs are instrumental because they contribute to GDP and facilitate job creation.
- COVID-19 contributed to the increase in SME creation in different parts of the world.
From times immemorial, people have always ventured into one line of business or another. While some are established to make profits, others exist to protect the interest of their members. However, one major factor that distinguishes businesses from each other is the volume of capital invested by the founders. This, therefore, indicates that a startup that runs with a fairly huge capital is bound to thrive better than its counterpart which runs with a lesser amount of capital. The focus of this article is to identify the importance of invoicing to SMEs following the surge of the COVID-19 pandemic towards the end of the last decade.
What are SMEs?
SMEs is the short for Small to medium-scale enterprises. They are characterized by a low staff strength. Aside from their personnel base, they operate from a relatively small space. In some parts of the world, they leverage the digital space and as such work virtually. This is not limited to whether they deal in digital or physical products. According to a body of information provided by Oberlo, a Lithuanian-based E-commerce and information marketing company, as collected from the US Small Business Administration, the number of small businesses in the United States rests at 32.5 million. Undeniably, this serves as an indication that they cover a huge percentage of the business in the giant economy.
Likewise, SMEs are described as micro-businesses or, simply, Small to medium-scale businesses. They are commonly innovative or commercial enterprises that strive to cater for recurring problems in today’s world. SMBs are also known for their capability of job creation. They create more employment per time than bigger firms and are heavy on skills as they make a careful selection of their team members. Their contribution to the Gross Domestic Product (GDP) of world countries is also very notable.
What are the characteristics of SMEs?
As said earlier, SMEs are important role agents in the economy. Below is a list of some of their hallmark:
- They have low staff strength.
- They are profit-oriented.
- Their organizational structure is flat.
- Sequentially, SMEs earn very little in returns.
- They operate on relatively capital.
- They are commonly innovative or commercial enterprises.
- They operate from very small office spaces.
- They are always open to social grants.
How did COVID-19 affect the statistics of SME creation in modern economies?
COVID-19 caused an increase in the number of SMEs created in the world generally. Major economies like the US, and Nigeria, a leading African economy, witnessed a high rate of new business entrants into different industries. For instance, the latter boasts of the awakening of the working population to tech. There was also a landmark innovation in the former. Startups pioneered this and set the giant economy ahead of many world countries despite the fallback caused by the pandemic.
Corona Virus, also known as SARS COV 2, became prominent in the late quarters of 2019. It is spread through fluids and is highly communicable. During the surge, many businesses in different parts of the world were affected, and many had to close down. However, after several attempts, trials, and errors, efforts were made to develop vaccines to curb the spread. Soon after, many businesses were reopened.
One of the major Post-COVID changes that affected world economics was the sudden increase in the number of SMEs. While the sit-at-home lasted, a lot of virtual establishments were pre-planned. They were brought to fruition soon enough after the containment exercise ended. A corresponding increase in the demand for digital skills and the provision of employment was also witnessed in most parts of the world.
The importance of invoicing to SMEs
Invoicing simply means issuing an invoice. For SMEs, the art of invoicing should be learnt because:
- It supplies basic information about the product to the buyers.
- It incidentally teaches the art of record keeping.
- Invoicing helps SMEs to measure sales and patronage.
- It is instrumental for customer relations.
- It hastens the updating of accounting records.
Frequently asked questions on the invoicing for SMEs
Below are some questions on the invoicing for SMEs and expert’s vetted answers to them.
Should an SME practice the art of invoicing?
Yes, a small to medium-scale enterprise (SME) should practice the art of invoicing. Aside from supplying important information about the products, an invoice also builds customer relations. This is because it is issued to make payment request. It also contributes to your brand uniqueness.
Can an SME use email invoicing?
Yes, an SME can use e-mail invoicing. It is even more appropriate if you run an e-commerce, retailing or other related business. A virtual or online business can build a reputation with its automated email invoicing setup. Notwithstanding, SMEs that operate from physical workspaces can also use email invoicing to complement their custom paper-type invoicing system.
How can I determine the best invoicing option for my small business?
To determine the best invoicing option as a small business owner, you must consider the mode of business that you are into. As a plus, you can download invoice template. Choosing an invoicing option that aligns with the technical know-how of your business is advisable. This is because it helps you, as an entrepreneur, to keep a level head under stress.
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Debitoor – 7 features that your invoicing software needs. Available at: https://debitoor.com/blog/7-features-that-your-invoicing-software-needs
Easy Software – Optimizing the invoice receipt process in 3 steps: receiving invoices by email. Available at: https://easy-software.com/en/newsroom/optimizing-the-invoice-receipt-process-in-3-steps-receiving-invoices-by-email/
EBRD (European Bank for Reconstruction and Development) – Our approach to small business. Available at: https://www.ebrd.com/small-business-support/our-approach.html
IqualifyUK – The impact of SMEs in the global economy. Available at: https://iqualifyuk.com/the-impact-of-smes-in-the-global-economy
You may also like: Google Docs Invoice Templates For Small Businesses