London, 23 September 2026: Britain’s small businesses have embraced digital technology, but they are losing 19 working days every year simply moving and re-entering information between apps that do not talk to each other, costing the economy an estimated £31 billion.
New research from Sage (FTSE: SGE), the leader in accounting, financial, HR and payroll technology for small and mid-sized businesses, found the average SME now uses 52 digital tools and 27 separate logins across its business.
But those tools frequently do not work together for business owners, with nine in 10 spending significant time manually moving and re-entering information between systems. Even sole traders juggle 44 tools on average, leaving many effectively doing a second job managing the technology that is supposed to make running a business easier.
Across the year, the average SME loses 19 working days to manual tasks that technology should be automating, which adds up to £5,700 per business.
Fragmentation is also making it harder for businesses to understand how they are performing, with more than four in ten (42%) admitting they regularly make financial decisions without all the information they need.
Nearly two-thirds (62%) of SMEs say having information spread across different systems makes it harder to understand the financial health of their business, while only one in ten can see their full financial picture in one place.
Steve Hare, CEO of Sage, said: “At Sage, we’ve spent years helping small and mid-sized businesses adopt digital technology. Now, we need to make it work harder for them.
“Losing nearly a month a year moving information between systems is time Britain’s SMBs should be spending finding customers, investing and growing. The next big productivity opportunity is connecting the technology they already use, so information can move securely, AI can do more of the heavy lifting, and business owners can get that time back.”
The impact goes beyond the time lost. More than half of SMEs say apps that do not talk to each other are pushing up their running costs, and almost seven in ten SMEs using more than one finance tool experienced a negative consequence in the past year, ranging from financial errors to missed tax deadlines.
If the administrative burden were reduced, small businesses say they would put the time back into growth. 37% would pursue new customers or enter new markets, 36% would invest in equipment and technology, and 29% would hire more staff.
At Purple Creative, a small design and marketing business, Amanda Winstanley enters the same customer information into multiple systems before work on a new project can even begin.
Amanda Winstanley, office manager at Purple Creative, said: "I didn't realise how many apps and tabs I have open just to do one task. I'm constantly dipping from one to another. It's only minutes lost, but they add up.
"Every new customer has to go into our CRM, accounting software, renewal spreadsheet and cash flow forecast before raising a ticket for the work. That's five systems, taking 15 to 20 minutes to set up, even for the most straightforward project."
From digital adoption to digital connection
The findings come as the Government puts small businesses at the heart of its growth plans and takes forward measures to increase digital and AI adoption among SMEs. Its Small Business Plan estimates that increasing SME growth by just one percentage point a year could add £320 billion to the UK economy by 2030.
More than four in ten SMEs, 42%, want to use AI more but say the financial information they need is spread across different systems. 53% say they would feel more confident using AI if that information was connected in one place.
Sage is calling on the Government to accelerate reforms including e-invoicing, Open Finance and a Digital Company ID, helping small businesses move information more easily between the services they already use.
That means not simply asking small businesses to adopt more technology but making the services and information they already rely on work better together.
For a typical SME, that could mean sending an invoice, accessing finance or completing compliance checks without repeatedly entering the same information or proving their identity across different systems.
Combined with AI, better-connected services could automate more routine admin and give businesses more time to focus on growth.
Building a more connected small business economy
Technology providers also have a role to play. By bringing accounting, banking, payments, payroll and other financial tasks closer together, businesses can complete more work in one place, reduce repeated data entry and build a clearer, more connected view of their finances.
With 5.7 million SMEs across the UK, reducing the friction created by disconnected systems represents a significant productivity opportunity. Connecting the digital tools businesses already use can help turn decades of digital adoption – and the emerging potential of AI – into more time, confidence and capacity to grow.
About the research
About Sage
Sage exists to knock down barriers so everyone can thrive, starting with the millions of small and mid-sized businesses served by us, our partners and accountants. Customers trust our finance, HR and payroll software to make work and money flow. By digitalising business processes and relationships with customers, suppliers, employees, banks and governments, our AI-powered platform connects SMBs, removing friction and delivering insights. Knocking down barriers also means we use our time, technology and experience to tackle digital inequality, economic inequality and the climate crisis.
