Small business owners devote too much time to admin
Those in charge of small up-coming businesses are spending too much time on financial admin during the early stages of their firm, instead of on growth and product development.
According to Tide, 63% of individuals that run a company in its infancy are spending at least one day every month on administrative financial tasks, from setting up bank accounts to calculating tax and expenses or developing invoices.
This valuable time that could otherwise be spent on developing the core offering of the business in order to boost their chances of survival and long-term success.
More than one third of the firms questioned as part of the survey said the rated the assistance on offer from banks and financial institutions as poor or very poor.
Two thirds also said they would not recommend their current bank to others, and were overly critical of the support on offer.
Poor customer service, a lack of information and issues relating to the ease of use of accounts were also named as potential reasons for this.
As a result, business owners said they were forced to schedule in more time to deal with financial tasks and red tape.
Although the majority of tasks are not complicated, they do take a significant amount of time to complete, especially when technology is not incorporated into the process.
Dealing with finances presents its own challenges
Bosses also revealed a number of challenges that they face when dealing with company finances, with tax calculations troubling 54% of those surveyed.
Accounting and expenses were issues for around half of firms (named by 51% and 49% respectively) while needing to manage multiple applications for services caused issues for 38% of business owners.
Invoicing and payroll did not cause as many problems, but they were still an issue for 30% and 18% of businesses.
There was a noticeable difference however among younger and older businesses – while a firm that was less than a year old struggled with tax (60%) and accounting (59%), older businesses struggled with expenses (55%) and payroll (27%).
Staying on top of finances is essential for any business, as those who do not keep a watchful eye on proceedings could easily exceed budgets, overspend or even end up struggling to survive.
Not monitoring company accounts also opens up the possibility of fraud, although forensic accounting services can be used in such instances.
By Phil Smith