Small businesses lose a month's pay to financial admin, research shows
New research by Sage reveals small businesses spend 24 days annually on financial administration, equivalent to working 13 months for 12 months' pay. Companies are looking to technology to streamline processes.
Small businesses are effectively working an extra month each year without pay due to financial administration tasks, according to new research by Sage. The study found that companies spend an average of 24 days annually on activities like invoicing, chasing payments, and correcting errors, amounting to one month's worth of labour for which they are not compensated.
The research indicates that nearly half of small business leaders (49%) dedicate four hours weekly to managing payment issues. Furthermore, a significant portion of businesses, one in three (34%), identify excessive bureaucracy as a hindrance to their productivity. This administrative burden can equate to substantial lost revenue if not addressed.
However, businesses are optimistic about the role of technology in alleviating this strain. A majority of businesses (63%) believe that AI tools, alongside advancements like e-invoicing and government initiatives such as Making Tax Digital, can significantly boost efficiency. Many (44%) identified investment in new technology as the primary means to improve industry productivity.
Footballer-turned-businessman Gary Neville highlighted the transformative potential of digital solutions. He explained that by reducing the time spent on routine paperwork, these technologies allow teams to focus on growth and strategic development, akin to a footballer focusing on playing the game rather than just training.