Britain’s community of sole traders and freelancers have delivered a split verdict on their ability to handle finance administration, as new survey findings revealed just how long micro business owners spend dealing with accounts.
The study, by finance management software provider KashFlow, asked founders running firms of nine staff or fewer what they like most and least about running a small company.
For 15 per cent of sole traders and freelance workers, finance administration was the least enjoyable part of being a business owner.
Half of respondents admitted they lacked confidence in tackling finance admin, while a third cited their daily bookkeeping responsibilities as “stressful”.
However, a significant number of Britain’s self-assured micro business owners were more than happy to take on their own finance admin.
A third believed they were “in control” of their accounts, while 42 per cent said they were “totally confident” in their own abilities.
Commenting on the findings, Oliver Shaw, CEO of KashFlow, said despite the varying responses in accounting skills, owners agreed time could be better spent elsewhere.
“It’s clear that even those who feel confident managing their accounts still find it challenging at times, and that the overwhelming majority of sole traders and small business owners would like to spend less time on it,” Shaw said in a statement.
For the UK’s army of 5.3 million micro business owners, tough finance administration could be costing the economy 19 million hours of productivity every month.
“Although half a day a month sounds reasonable for such a task, almost a third of those surveyed are spending longer than that, which is time they could be spending on doing what they love or, exploring growth opportunities,” Shaw added.
One solution that could ease the burden of finance administration is the use of separate personal and business accounts.
Research has shown as many as three-quarters of micro business owners use personal bank accounts for company transactions, losing up to 15 days of work every day to untangle business and personal finances.
Combining all finances into one account also minimises the risk of inaccurate tax submissions to HMRC.
Our FreeAgent tax expert, Emily Coltman, has some important advice for sole traders and freelancers looking for finance administration support:
- Five ways to spring clean your business books
- Last-minute tax-saving tips ahead of the new financial year
- Going to miss the self-assessment deadline? Find out the excuses you will need
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