Micro businesses spend 10 weeks a year trying to sort out their finances and accounting compliance is one of the most stressful tasks
The average micro business works 79 hours per week, of which 15 are spent on financial administration – equivalent to 19%, according to research by digital only banking service, Starling Bank.
Accounting was viewed as the most stressful part of running a business by many and was more likely than any other task to eat into downtime, with a third (32%) of micro owners stating this was the case.
Tax compliance is another area where micros are concerned that they will trip up over complex laws and face HMRC penalties, while changes to VAT reporting have also had an impact under Making Tax Digital for VAT.
When asked what could save time in the finance department, one in five (19%) said that being able to see and access all of their finances in one place could be the answer, while one in six (16%) recognised the benefit of having an accounting system integrated with their bank account.
The research also found that the smallest firms are disproportionately impacted by this kind of work, with sole traders spending almost a third (31%) of their labour time on financial admin work, and companies with 1-4 employees devoting a quarter (25%) of their time to this area.
Editor, Accountancy Daily, published by Croner-i Ltd
Extracts from an Article by Sara White