New survey shows
Small business owners are wasting considerable amounts of their time on routine financial admin in the early stages of their companies’ lives, according to a new survey.
The figures – released by Tide, the new banking service designed specifically for small business – show that most entrepreneurs (63 per cent) running young companies spend at least one day every month on administrative financial tasks, such as setting up bank accounts, tax calculations, invoices and expenses.
Tide spoke with 149 small business owners and sole traders in the UK about their experiences of small business banking and of managing their finances. In all, over one-third (36 per cent) of respondents rated the help and support received from their bank when setting up an account as poor or very poor, while two-thirds (67 per cent) said they weren’t likely to recommend their current business bank to others.
Furthermore, almost half (47 per cent) of respondents felt the service they’d received from their bank after becoming a customer was ‘poor’ or ‘very poor’, and 36 per cent said they were dissatisfied with how easy their business bank account was to use.
Respondents also revealed their most significant frustrations and challenges in managing their company’s finances. Topping the list was tax calculations (a challenge for 54 per cent of those surveyed), followed by accounting (51 per cent), keeping track of expenses (49 per cent), having to use multiple applications to manage different services (38 per cent), invoicing (30 per cent), and payroll (18 per cent).
Companies less than a year old were more likely to struggle with tax (60 per cent) and accounting (59 per cent) issues, whereas companies that have been operational for longer are more challenged by responsibilities such as payroll (a problem for 27% of companies between 1-5 years old) and keeping track of expenses (55%).
George Bevis, CEO of Tide, said: “The UK’s economy is founded on the success of small businesses, but these figures show that many simply have not been receiving the help and support from banks that they need. In the early days of starting a new business, entrepreneurs and sole traders all too easily find themselves tied up in financial red tape. And while the tasks they have to complete aren’t necessarily complicated, they are time-consuming and unfamiliar, and there can be significant consequences if done incorrectly. With modern technology, there is no reason why banks can’t help their customers to navigate these waters more efficiently and save them time, but they simply aren’t doing so.”