Businesses in Sussex are being held back by poor financial management.

Researchers found that 72 per cent of small businesses in the South East had a major financial problem over past year, costing firms in excess of £320 million.

To help firms keep a tighter grip of their finances a Better Finance programme has been launched with Business Links, enterprise agencies and Barclays.

Financial software group Clearlybusiness said poor financial management practices were significantly holding back growth and survival prospects.

The group is urging the Government to examine how the situation can be improved.

Research commissioned by Clearlybusiness showed most small businesses lacked basic financial know-how.

A third never monitored their budgets and 42 per cent were setting prices on products and services without full knowledge of what it cost them to produce.

Only 18 per cent of business owners in the South-

East had any formal business qualifications.

The biggest financial headaches were found to be keeping track of who owes the business money and income/corporation tax problems.

Only 34 per cent of small businesses employed any kind of specialist bookkeeping software to help manage their finances.

Director of clearlybusiness Markus Clavin said: "Having good financial management capabilities is a key differentiator between those business that survive and grow and those that fail.

"Our report shows a clear distinction between small businesses with higher growth rates that are generally better trained, qualified and more confident in respect of financial management and the financial management of businesses who have seen their turnover decline.

"If we truly wish to create an entrepreneurial Britain which is capable of generating more sustainable jobs then more attention needs to be given to supporting better financial management."

KEY: Markus Clavin