New Study Reveals Weight of Administrative Burden on Small Business

Date: September 19, 2017

A recent Sage report identified how much time small businesses waste on administrative tasks. The answer? So much that it's stunting economic growth.

On average, small businesses currently spend around 120 days a year on administrative tasks like paperwork and accounting alone, according to a recent Sage report. Imagine what you could do with all of that extra time. 

The survey found that, in the United States, 4.9 percent of a small business’ time is lost to administrative tasks. If that time were returned, the nation’s GDP could increase by an added $335.3 billion. Small businesses already account for over 50 percent of the United States’ GDP, as pointed out by Small Business Trends.


So what tasks specifically are making small businesses less efficient? The study identified accounting, HR, payroll, tax-related duties, managing late payments, invoice generating and processing, and talent acquisition and training as the duties overloading small businesses’ time. Some of these time-consuming tasks, like accounting, could be streamlined by digitization or with software solutions. 

In the U.S., 30 percent of survey respondents said that there was no reason they weren’t digitizing their administrative tasks. Twenty-five percent said it was too time-consuming, and twenty-three percent said that implementation was too costly. The rest had reasons like processes being too complicated, the incompatibility of their legacy systems, or a lack of training. 

According to Sage CEO Stephen Kelly, small businesses need to make the switch over to using administrative software, which will save money and time in the long haul.

However, one of the main underlying causes of time wasted on administrative tasks can be attributed to government regulations. “Small businesses also face an enormous regulatory burden, forcing them to spend thousands of hours on compliance,” NFIB President and CEO Juanita Duggan wrote in her op-ed for The Wall Street Journal.

NFIB’s Small Business Problems and Priorities survey found that “unreasonable government regulations” is the second largest problem for small business owners. So while digitization can help small businesses manage their time more efficiently, what small businesses really need is deregulation, which will increase productivity and boost the economy.




Infographic: Productivity and Business Owners

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