Smaller organisations were particularly challenged by salary costs, other benefits and compensations – citing it as their single biggest financial issue.
Chartered Accountants Ireland and Grid Finance – an organisation that finances SMEs – surveyed 300 people from across Irish businesses to find that a majority (77pc) said they have seen their costs go up over this period – four out of 10 expect to be worse off this time next year.
SMEs also named operational costs (24pc) and regulatory compliance costs (14pc) as major financial challenges, just ahead of capital management and access to funding.
More than half of the businesses said they needed more government support in regulatory compliance and understanding legal guidelines.
There is an evident mismatch between the need for supports and the uptake of those on offer
The survey also revealed a significant gap between the demand for incentives and the actual uptake of government supports by SMEs – with incentives for tax relief, grants and energy being availed by fewer people in comparison to the demand for it.
Cróna Clohisey, Director of Members and Advocacy at Chartered Accountants Ireland, said SMEs found the process too difficult and inaccessible.
“There is an evident mismatch between the need for supports and the uptake of those on offer,” she said.
“In the case of tax reliefs and access to grants or loans for example, this may be attributable to a perceived lack of accessibility, particularly for time and resource-constrained SMEs who simply find the application process too cumbersome.
Cróna Clohisey of Chartered Accountants Ireland
“Further steps need to be taken to ensure that business reliefs such as these are not overly difficult to claim if their effectiveness is to be meaningfully felt by small businesses.”
The survey found mixed reactions to the question of profitability – around three in 10 businesses said their business profitability had increased, while a similar number report it had decreased.
Smaller businesses reported greater stability, with more than half saying profitability had remained the same during this time.
It also found that most local businesses are optimistic despite trade uncertainties – 27pc of respondents forecasted their business to be significantly better off by this time next year.
Eoin Christian, Grid Finance’s CEO, said businesses under pressure will need state support to work through cost challenges.
“Rising costs, particularly staff-related expenses, are creating significant pressure on Irish SMEs. While these challenges are real, they also represent an opportunity for SMEs to take stock, streamline operations and invest in smart, sustainable growth strategies.”
source