A new report has revealed that micro-businesses in the East Midlands spent more than two months of the year working on financial admin.
According to the ‘Make Business Simple’ report from digital bank Starling, the average micro-firm in the East Midlands clocks up 71.5 hours of labour each week, of which 13 hours are spent on finance admin tasks – which is 18% of total time, equating to nine and a half weeks of the working year.
East Midlands micro-businesses recognised this as an issue, with a quarter stating that they spend too much time on financial admin. When asked what effect this has on the rest of the business, 17% believe it hampers growth, while a quarter say that if they could reduce time spent on finances, they would divert the labour towards sales.
Firms in the study also recognised the impact of finance-related work on life outside the business, with 45% claiming that it affects their personal life, 13% stating they have been kept up at night thinking about finance work, and 14% also admitting it negatively affects holidays and downtime.
The most time-consuming finance tasks are the processing and managing incoming payments, which takes micro-firms in the East Midlands 1.5 hours each week, equating to 10 days a year spent solely on making payments. Unsurprisingly, this task was also more likely than any other financial admin job to eat into downtime, with two in five (39%) micro-firm leaders stating this is the case.
When asked what could save time in this department, one in seven (14%) felt that being able to see and access all of their finances in one place could be the solution, while a fifth (22%) 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 unequivocally shows is that these firms are spending a huge amount of time on financial admin work.”