How many business tasks are you juggling right now?
The productivity puzzle continues for UK small and medium-sized businesses looking to balance their increasing business admin requirements while growing their companies.
New Sage-commissioned research shows the total amount of economic value lost to admin in the past 12 months totalled £446bn, an increase of 2.6% from last year.
According to Sabby Gill, managing director for UK and Ireland at Sage: “The productivity puzzle is far from solved. Globally, on average, productivity modestly improved yet global economic growth outstripped productivity gains, creating this international productivity deficit.”
The research shows the average time businesses lose to admin is 120 hours a year (this equates to a loss of £39.9bn worth of productivity across UK businesses), which includes tasks such as chasing late payments, processing invoices and HR tasks.
Accounting takes up the largest portion of admin costs at 15%, while generating invoices (14.2%), HR (12.6%), processing invoices received (12.5%), payroll and talent acquisition (12.1%) follow closely behind.
As small business owners scale up, grow their top line, hire more staff and contribute further to the economy, managing the admin aspects of their companies becomes an even greater challenge.
Speed up productivity with better business management tools
Our research suggests that even though companies and economies are growing, not all the economic value that is created is productive.
Today, there is a great opportunity to increase productivity further by investing in technology to give valuable time back to small and medium-sized businesses globally.
“In 2019, it is unacceptable that the growth in small and medium-sized businesses, who make up 60% of all private sector employment in the UK, is still hindered by access to digital tools and digital skills,” says Gill.
“With less than a third of those small businesses surveyed in the UK currently using cloud technology for administrative tasks, compared to one in two large businesses, there is a clear gap that must be closed so that the benefits can be felt by all.”
Employing smart technology for business management
Productivity coach and trainer Grace Marshall says: “It may feel like you need more time, but the real battle is for more attention.”
Intelligent business management tools prioritise your business data to keep the information that you need to focus on visible, while managing the smaller details in the background.
Here are a few examples of how this improves productivity in the areas where our research shows admin takes up the most time.
Real-time accounting data
Accounting in the cloud offers many immediate benefits as automation reduces the need for manual processes and decreases the margin of human error.
Accuracy within your accounting increases, and because your data is accessible from anywhere via the cloud, you always have access to the critical information impacting your company’s financial health.
With those details available upfront, you can make better predictions about your financial performance and take quick action if there’s a problem or an opportunity.
Today’s human resource management software offers self-service features to reduce the time spent on payroll and HR management processes.
It also includes access to extensive support, training and services to help you get the most out of the software. These features are built to reduce costs and uncover valuable information about your workforce performance.
Antiquated payment methods such as cheques generally result in delays, so go digital.
There are many tools you can use to make this process efficient, such as cloud accounting software, which makes the issuing and payment of invoices as simple as possible.
Integrating with an invoice payment offering enables your customers to pay directly from the invoice using their credit or debit card.
This eliminates the need to follow up on late invoices because you receive a notification when the invoice is received and paid, and the transaction data is automatically trackable within your accounting.
Even the smallest payroll errors can have disastrous consequences, especially if they remain undetected for years. And the risk of error significantly increases as your business grows and its payroll becomes more complex.
Ensuring you have the right payroll systems and processes in place is critical, especially if you run a fast-growing business that has outgrown its payroll software.
Payroll reporting challenges can also impact profitability and cash flow.
Penalties and fines due to inaccuracies and non-compliance are costly. You can also miss opportunities to positively impact your bottom line without the proper reporting support.
Investing in modern business management software that supports payroll helps you to manage the key performance indicators of a healthy payroll function:
- Cost of payroll: Identify ways to make payroll processing less expensive.
- Time to run payroll: Track how long your entire payroll process takes you, from the point you collect time and attendance data to when you distribute the last paycheque. You can also track how long a specific step (or a certain group of steps) takes.
- Productivity and effectiveness: Reduce the number payments you process outside of your normal payroll cycle and the time it takes you to fix payroll errors.
Conclusion on the productivity puzzle
The numbers are adding up in terms of the admin burden on productivity for small businesses but the solution is within reach.
Businesses that adopt technology are better equipped to manage the requirements that pull business owners in multiple directions and take steps to solve the productivity puzzle.
Sage is committed to helping business builders make the most of their time so they can focus on doing what they love. We’re keeping tabs on the global cost of productivity down to the second with our admin burden tracker.
Reduce admin and boost productivity
Trying to build your business but admin is getting in the way? Get your free guide and read it for advice on managing your time and using tech to reduce your admin.