Introduction
The financial management of small and medium-sized enterprises (SMEs) has evolved in the past year, driven by macroeconomic factors, regulatory requirements, and technological advancements rather than a shift in mindset.
Levels of Financial Maturity
According to the study “Elevating the Financial Maturity of Mexican SMEs” by Xepelin, SMEs are categorized into four levels of financial maturity:
- Reactive: No formalized financial processes and reactive decision-making.
- Organized: Basic financial processes, budget creation, but no projections or contingency plans.
- Proactive: Formalized processes, use of financial tools, and delegated management.
- Strategic: Integrated financial management with business strategy, advanced technology use, delegated management, and comprehensive understanding of financial solutions.
In the past year, the percentage of reactive businesses decreased by 16 percentage points, from 40% to 24%. This indicates an increase in organized (38%) and proactive (26%) SMEs.
Regulatory Compliance as a Catalyst
Alejandro Toiber explains that the need to improve regulatory compliance has acted as a positive catalyst, transforming regulatory requirements into a platform for data improvement by automating controls and decision-making processes.
The evolution is also attributed to the use of digital tools, accessible AI, and increased awareness of risks, with businesses viewing technology as a lever to secure their operations.
Benefits of Financial Management
Alejandro Toiber highlights that financial maturity enables SMEs to utilize their financial resources more strategically, make intelligent decisions, and seize opportunities.
“Financial maturity becomes a capability for resilience, helping SMEs improve internal management and their relationships with clients and suppliers,” Toiber adds.
According to the Mexican Institute for Competitiveness, a company’s ability to use data for better financial decision-making distinguishes those that react from those that generate new income.
Economic Uncertainty
Economic uncertainty has affected how businesses use their capital, as the study shows that the primary focus of financial funds is on working capital, while last year’s priority was generating new income.
“This year has a more cautious mindset. The priority is managing and protecting working capital. We’re seeing businesses wanting to secure their operations, ensuring they can continue functioning, especially in environments with little liquidity and high change and uncertainty,” Toiber notes.
Challenges for SMEs
Amidst this context, organizations aim to have a skilled workforce; however, financial management remains the responsibility of the business owner or family director in 60% of companies, hindering growth.
“This naturally creates bottlenecks and prevents growth. Imagine a company where one person makes all decisions, who may not have the most information, such as the founder or family patriarch,” Toiber explains.
Another challenge SMEs face is preparedness for unforeseen events, as only 28% conduct scenario exercises and 12% create contingency plans.
Key Questions and Answers
- What are the levels of financial maturity for SMEs? There are four levels: Reactive, Organized, Proactive, and Strategic.
- How has regulatory compliance impacted SMEs? It has acted as a positive catalyst, transforming regulatory requirements into data improvement platforms.
- What benefits does financial maturity bring to SMEs? It enables strategic use of resources, intelligent decision-making, and opportunity capture.
- How has economic uncertainty affected SMEs’ capital usage? It has shifted the focus from generating new income to managing and protecting working capital.
- What challenges do SMEs currently face? They struggle with having a skilled workforce and ensuring financial management is not solely the responsibility of the owner or family director, as well as preparing for unforeseen events.
