Start-up firms should use outside accounts and conduct reviews of financial matters on at least a quarterly basis, it has been claimed.
Clair Savidge, an adviser with Business Link, explained that regular audits by an accountant will help SME owners keep on top of their finances.
He said: "Some business owners are financial whizzes, so they're probably not likely to need a quarterly review, but they certainly should have a six month review and not wait until the accountant says, 'here's your accounts, you made a loss this year'."
Mr Savidge added that while using an external accountant might be more costly, the expert knowledge they have can bring to light things people were previously unaware of.
In doing so, the accountant can also help them reduce tax bills and take advantage of other "specials schemes" that are available, he concluded.
According to a recent study by the Professional Oversight Board, an accountancy regulatory body, some directors of small firms do not recognise the value of good financial information.
