03-08-2007
Small businesses lose time and money on financial administration
New research from MYOB shows that almost half (46%) of small business owners admit that the time they spend on business administration harms overall profitability.
The average small business owner spends the equivalent of 26 days a year on general and financial administration – almost double the number of days they take for annual leave. All this time spent away from other vital areas of running a business is costing UK SMEs around £4.8 billion a year.
Other findings of the survey, which covered 500 small businesses, revealed that business owners estimate that they could boost their productivity by more than 22% if the administrative burden was eased. It also found that 33% of respondents still use Excel spreadsheets to manage company finances, with some (19%) still using paper based sales ledgers.
Every year tax and compliance issues become more complex, and often the financial burden is on the business owner if the business can’t afford to hire a specialist for the job.
Wayne Schmidt – General Manager of MYOB – said: “The financial management burden ... 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.
Using more efficient processes to carry out time-consuming admin will help small businesses to not only claw back this wasted time but also invest it in actually developing and growing their business.”
Simply Business Head Invoice Finance Consultant, Robin Gaines, suggests that for businesses which experience growth problems due to both a lack of cash flow and too much time spent on administration, invoice finance could be a suitable solution.
“Small businesses such as manufacturers, printers or staffing agencies benefit from Factoring solutions because it regulates and improves cash flow while taking away the time and hassle involved with managing a sales ledger.”
