Micro-businesses in Wales spend two months of the year working on financial admin, according to a new report, Make Business Simple, from digital bank Starling.
The report was created to shine a light on the practices of the UK’s 5.6 million micro-firms, which make up 96% of the business population, and encourage them to embrace new ways of cutting down time spent on financial admin.
Starling Bank found that the average micro-firm in Wales clocks up 88 hours of labour each week, of which 14 are spent on finance admin tasks, which is 16% of total time, equating to over eight weeks of the working year.
Welsh micro-businesses recognise this as an issue, with more than a third (36%) stating that they spend too much time on financial admin. When asked what effect this has on the rest of the business, 13% believed it hampers growth, while a quarter (26%) say that if they could reduce time spent on finances, they would divert the labour towards sales.
Welsh micro-firms also recognised the impact of finance-related work on life outside the business, with half (49%) claiming that it affects their personal life, one in ten (13%) stating they have been kept up at night thinking about finance work, and the same proportion (13%) admitting it negatively affects holidays.
The most time-consuming finance tasks are accountancy tasks such as forming profit and loss accounts, and processing and managing invoice payments, both of which take micro-firms in Wales 1.5 hours a week, equating to 10 days a year. Accounting and tax tasks were also more likely than any other financial admin task to eat into downtime, with 28% of micro-firm leaders stating this is the case.
When asked what could save time in this department, 13% of firms felt that being able to see and access all of their finances in one place could be the solution. The same percentage (13%) of firms recognised the potential benefit of having an accounting system integrated with their bank account.
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 research shows is that these firms are spending a huge amount of time on financial admin work.”