Abstract
Existing financial problems of SMEs, which have an important place in the economies of countries, deepen even more in times of crisis, affecting businesses negatively and leading them to failure. In the crisis conditions, the strategies that SMEs have implemented in order to maintain their balance in their economic activities and to be successful are of critical importance. For this purpose, a method has been proposed for SMEs to determine the exit method from the crisis in the first crisis phase, which they will notice before entering the chronic crisis phase. In the proposed method, a financial check-up was planned to include 1-Current Assets, 3-Short-Term Liabilities, 5-Equity and production and sales strategies. In addition, as a result of the application of this proposed method periodically, SMEs' control of finance and cash flow will contribute significantly to both their protection from economic problems and their internal control systems.
TopLiterature Review
Researches on the effects of economic crises that have serious consequences for businesses are given below.
Boer (1999) mentioned the necessity of reducing the cash deficit, which is defined as the difference between cash inflows and cash outflows, especially in times of crisis, and also suggested that measures should be taken to reduce and slow down cash outflows in order to increase stock turnover and increase and accelerate cash inflows. Payne (2002), Wallis (2002) and Sullivan (2003) emphasized the importance of cash and the management of working capital in crisis periods. In addition, it has been revealed that the resource costs of SMEs, whose cash and financial structures are affected more in crisis periods, increase more than when comrared to larger enterprises (Arslan, 2003). According to the findings of Aşıkoğlu & Ögel (2006), which they obtained from their study on the effects of the 2001 financial crisis on manufacturing companies, the short-term debts of enterprises increase in crisis periods and the share of equity in total resources decreases. It was also due to the increase in receivables and stock turnover rates in the crisis year and the following year compared to the pre-crisis period, and the decrease in liquidity ratios, equity and total profitability during crisis periods. Apak et. al. (2012) in their research to evaluate the perspectives of SMEs on accounting measures that should be taken in times of crisis, they concluded that SMEs attach importance to cost-saving, cash flow and strategic measures. The result of the study also shows that the implementation of policies that accelerate cash flow rather than cost-reducing techniques and expansion investments during crisis periods plays the most important role.
Key Terms in this Chapter
Competitive advantage: Conditions that enable a business to produce a good or service of equal value at a lower price or more desirable than its competitors.
Small and Medium-sized Enterprises (SMEs): Compared to large-scale enterprises, they are enterprises with smaller employee numbers, turnover or balance sheets and defined borders.
Economic Crisis: Economic crises that occur in a certain period or unexpectedly due to inadequate or wrong management.
Cash Flow: These are the changes that occur in the cash status of the business between two specific periods.
Idle Stock: It is the situation that there is no demand for the products in stock for a certain period of time.
Financial Check-Up: Identifying financial problems that are noticed and overlooked or unrecognized by evaluating the data through financial statements and having information about various financing alternatives.
Short-Term External Resources: It covers the foreign resources that the enterprise will pay within one year or until the end of the operating period.
Accounting Internal Control: These are all methods and procedures for businesses to achieve the goals they have set, to make accurate and complete accounting transactions such as income, expense, receivables, and debt to detect and prevent mistakes and frauds, to prepare financial statements in a reliable and analytical manner in accordance with their purpose.