How to Spend Less Time on Financial Admin

Photo by Sear Greyson on Unsplash

A new report published by Starling Bank has revealed that UK micro-businesses are spending 10 weeks a year working on financial admin.

The report, Make Business Simple, studied more than 1,000 UK micro-businesses and found that the average firm spent 15 hours a week on finance admin. With most firms clocking up 79 hours of total labour each week, this equates to 19% of total time just on financial admin.

Smaller firms are likely to spend even more time on these tasks, with sole traders dedicating 31% of their labour time to financial admin, and companies with one to four employees 25% of their time.

The most time-consuming finance task is accounting. The study found that micro-businesses are spending an average of 1.7 hours a week (for a total of more than one week a year) keeping the books. It’s unsurprising then, that accounting is also considered the most stressful part of running a business.

Many of the businesses surveyed recognised that financial admin was taking up too much time and impacting growth.

So what can small businesses do to save time in this area? Here are four suggestions as recommended by Starling Bank and us here at Papertrail Bookkeeping:

1.       Find out where your time is being spent

The first thing you should do is figure out exactly where time is being spent. Keep a timesheet of your financial admin work for the next few weeks. This timesheet will show you which tasks are the most time-consuming and where you need to make improvements or outsource the work. It might even reveal that the financial admin isn’t so time-consuming after all.

2.       Adopt the latest technology

Online banking and bookkeeping software are inexpensive ways to streamline essential work. You can even link bookkeeping software with bank accounts and selling platforms which automates a lot of the work. It’s far more efficient than the pen and paper approach, and while there is a cost for the software it saves so much time that it will pretty quickly pay for itself.

3.       Little and often

Don’t let work mount up – it becomes cluttered and confusing and you’re more likely to make mistakes. Instead, set aside some time each week to tackle the financial admin. Little and often is a more efficient approach and it helps you understand your finances in real time. Plus you won’t be hit by late penalties or suddenly find yourself with a cash flow gap because you’ve ignored the finances for months on end.

4.       Hire a bookkeeper

For all those especially time-consuming and stressful accounting tasks, hire a bookkeeper. A bookkeeper will give you back several hours a month to spend on generating sales and pushing growth. Many small businesses think they can’t afford a bookkeeper, but a bookkeeper will generally save you money. Want to know more? Read this: 3 Reasons You Should Hire a Bookkeeper For Your Small Business.

Don’t let your small business spend more time than is necessary on financial admin. Contact us today to find out how we can save you time and money.