The problem surfaced dramatically during United's 3-2 defeat by Aldershot on Saturday - their first home defeat of the Blue Square campaign, which raised major questions over whether the squad is good enough to go up this season.
Smith conceded that Marvin Robinson should have had a hat-trick, and he said Rob Duffy, who was withdrawn at half-time, doesn't produce enough effort.
Oxford's problems in front of goal were compounded by them handing the opposition goals at the other end, all begun by French defender Arthur Gnohere flailing an arm at a corner to give away a penalty for handball.
The U's battled back from two goals down at half-time with Yemi Odubade and Eddie Anaclet greatly improving the team, only to blow it late on with Robinson missing another sitter, and the team conceding a third goal at a corner.
Smith said his decision to start with Robinson and Duffy, and with Matt Day instead of Anaclet, followed reports he'd had on Aldershot, who have now won all five games on their travels.
"We started with that team because our reports told us Aldershot were a very big side, they were very direct. we thought we needed a little bit of strength to match that and let the game settle down, and go on from there.
"But when you give goals away like we did, it doesn't matter what plans you have, they're going to be spoiled.
"So we changed it, and it went very well, it went to 2-2, but we lost our momentum, I thought we should have gone on.
"Having said that, Robinson should have had a hat-trick," said the veteran U's boss. "The two he had when he went through, I could have put them away."
And Smith believes Robinson squandering his opportunities wasn't down to low morale.
"It's nothing to do with a lack of confidence, he's not a natural finisher. Marvin did everything right twice or three times, apart from his final decision.
"But he works hard and others don't. When you've got Duffy not working at all, you pull him off. Duffy wouldn't get in those positions to score, or to miss, should I say."
United's manager said the failure to convert simple opportunities was starting to haunt the team, just as it did last season.
"We haven't got Gary Twigg fit, and Yemi comes on and does the same, missing golden situations.
"Yemi's always going to be a threat with his pace, but he doesn't score goals either.
"That's a major problem for us. It was last year and it is again. We've got five forwards and it looks as thought it's going to be a problem again because the goals we miss . . . they're not hard chances and it's so frustrating."
Gnohere was also hauled off at half-time after his needless handball.
Smith said: "There's no reasons why we do what we do. we set off reasonably confident, then somebody puts his hand up and gives away a penalty. It changes games.
"Arthur got more nervous as the game went on after that, it spreads throug the back, and through the team a bit.
"Having said that, Robinson should have made it 1-1 and then you can go on.
"But Aldershot scored again and that was another bad goal. We had situations which would have changed the game.
"We actually changed the game by getting the two goals as quick as we did yet we didn't go on from there as well as we would have liked.
"But we still had three or four very good opportunities - and we let another daft goal in."
Source: http://www.oxfordmail.net/