The number that jumps out is scary. According to a new report by cloud accounting software leader Sage, an average of 120 working days spent per year is on administration. That accounts for approximately 5 percent of the total manpower for the average small-
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and medium-sized business.
What's a small business to do?
The report – "Sweating the Small Stuff: The Impact of the Bureaucracy Burden" – surveyed decision makers within the organization and across a variety of markets, including the United States, Australia, Brazil, Canada, France, Germany, Ireland, Singapore, South Africa, Spain and the United Kingdom. For Sage, that means more than three million customers, including small and medium businesses in 23 countries, including the surveyed regions.
The research, conducted by Plum Consulting, shows that an increase in productivity by five percent in the United States could lead to an increase of close to $325 billion in gross value add (GVA) per year. GVA measures the contribution to an economy of an individual producer, industry, sector or region. This increase could be partially achieved through the reduction of time spent on business administration.
Research also found that small businesses, particularly, spend between 230 and 240 days per year on administration, which equates to 17 percent of total manpower spent on administrative tasks each year. This represents a significant opportunity for team members to spend more time on strategic business projects and less time on administration.
The largest administrative task for small and medium businesses in the United States is accounting, which take up nearly a quarter of all administrative tasks. Operational tasks such as recruitment and HR represent a smaller burden for entrepreneurs.
Companies in the U.S. appear to have a good understanding of where the largest burdens lie and have begun to digitize the process with roughly 30 percent of all SMEs surveyed noting they have fully digitized their accounting. But close to 50 percent of those surveyed have no software solution, reinforcing the opportunity.
The report, which encompasses feedback from more than 3,000 business builders, reveals that complying with administrative and regulatory requirements has a significant business impact in terms of manpower that must be devoted to the tasks that don't help grow the business.
Click HERE to read the full report.