UK micro-businesses spend up to 10 weeks of the year working on financial admin, according to a new report from Make Business Simple.
The report, commissioned by Starling bank, studied over 1,000 micro-businesses, and found that the average business will spend 15 hours of weekly labour on financial admin tasks. This equates to 19% of total labour hours overall.
A third of micro-firm leaders said that accounting was “seen as the most stressful part of running a business” and was “more likely than any other task to eat into downtime”.
Some 27% of respondents said that they spent “too much time” on accounting. With smaller firms of five to nine workers, this figure rose to 46%. Sole traders said they spend 31% of labour time on financial admin.
One in 10 respondents also said that the time devoted to accounting “hampers growth” of the business, diverting labour time away from concentrating on sales.
Anne Boden, CEO and founder of Starling Bank, said: “The importance of micro-businesses can’t be overstated. They make up the vast majority of enterprises in the UK, employ almost nine million of us and generate nearly a trillion pounds in revenue each year.
“What our findings unequivocally show is that micro-businesses are spending a huge amount of time on financial admin work.”
Aina Gomez, a Starling customer, said: “I didn’t get into business to do finance-related admin, but without it, you are doomed. I’m still learning.
“I’ve purposely put myself through some training, but I can still say that this is the worst part of running a business. However, I realise how key of an issue it is and keep pushing to learn how to do it better.”