A new report by Starling Bank has shone a light on how much time small businesses spend on finance administration. The bank conducted interviews with over 1,000 micro-businesses (1-9 employees) and sole traders to build a picture of the impact that finance administration has on them.
10 Weeks a Year
This is the startling amount of time that micro businesses are spending on financial administration. The research found that the smallest firms are disproportionately impacted by this kind of work, with sole traders spending almost a third (31%) of their working time on financial admin work, and companies with 1-4 employees devoting a quarter (25%) of their time to it.
Micro-businesses in the study identified that this is becoming an issue for them with more than quarter (27%) stating that they spend too much time on financial admin, rising to almost half (46%) among firms with 5-9 workers. When asked what effect is has on the rest of the business, one in ten (10%) believed it hampers growth while a fifth of micro-firms (21%) say that if they could reduce time spent on finances, they would divert effort towards sales and other business development activities.
Firms in the study also highlighted the impact of finance-related work on life outside the business, with a third (33%) claiming that it affects their personal life, one in ten (11%) stating they have been kept up at night thinking about finance work and 12% admitting it negatively affects holidays.
According to the report, the most time-consuming finance task is accounting. It was also seen as the most stressful part of running a business and was more likely than any other task to eat into downtime, with a third (32%) of micro-business leaders stating this is the case.
What can be done?
When asked what could save them time, one in five (19%) firms felt that being able to see and access all of their finances in one place could be the solution, while one in six (16%) recognised the potential benefit of having an accounting system integrated with their bank account.
At CB Reid, we work with clients to put in place strategies for them to effectively manage their business and develop an efficient approach to their financial tasks. We have experience of working with business of all sizes and working across the accounting software spectrum. We can help you identify the best accounting software for you, help with bank feed integration and show you other online tools and apps that could help make your finance tasks more manageable.
Get in touch with a member of the team and we can get started!