Small firms wasting billions on financial admin
Small businesses in the UK are losing up to £4.8bn a year by spending excessive amounts of time balancing the books, it has been claimed.
Research by software and services provider MYOB found that almost half of small business owners believe that spending too much time on financial administration is having a negative effect on their firms’ profits.
The study found that the average small business owner spends the equivalent of 26 days a year on financial admin, compared to an average of just 14 days on annual leave.
This is perhaps unsurprising however, the survey found, given that a third of small businesses are using an Excel spreadsheet to manage their company’s finances, while a further 19% are relying on paper-based ledgers.
Wayne Schmidt, general manager of MYOB, commented: “With compliance and tax issues growing in volume and complexity year on year, the financial management burden is reaching a tipping point and is affecting the profitability and performance of many businesses up and down the country.
“Small businesses must implement more rigorous financial management systems and techniques to release the valuable time they spend on admin tasks and invest it in more profitable activities.”
Schmidt added that the use of more efficient processes would enable small business owners to invest more time in developing and growing their companies.
