How many business tasks are you juggling right now?
The productivity challenge continues for small and medium-sized businesses looking to balance their increasing business admin requirements and to grow their business. A new Sage-commissioned research shows the total amount of economic value lost to admin in the last 12 months totaled $446 billion globally, an increase of 2.6% from last year.
Nancy Harris, Sage North America managing director, says “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 lost to admin in the US is 4.8%, which includes tasks such as chasing late payments, processing invoices, and HR functions. We found that 71% of US businesses spend at least 35 hours a week on compliance-related tasks, and 52% of businesses that import/export internationally ensure their trade compliance manually. All of this time spent on admin equals $346 billion in lost productivity. As businesses scale up, grow their top line, hire more staff, and contribute further to the economy, managing the admin aspects of the business 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 being 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.
Intelligent business management tools prioritize 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 business’ 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.
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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, like checks, 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 issuing and paying invoices easy. 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. 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’re 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 time you collect time and attendance data to the time you distribute the last paycheck. You can also track how long a specific step, or a certain group of steps, take.
- Productivity and effectiveness: Reduce the number of payments you process outside of your normal payroll cycle and the time it takes to fix payroll errors.
The numbers are adding up in terms of the admin burden on productivity for small and medium-sized 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.
Sage is committed to helping business owners 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.
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