Admin overload costs Australian small businesses over $20 billion a year

Niko Iliakis

Thursday 02 May 2019

Of all the challenges that small business owners face, admin overload has to rank among the most frustrating. And when things like responding to emails, handling payroll and navigating red tape start hitting a business’ bank account, it goes from frustrating to a serious problem.

But just how much do these pressures wind up costing Australian small businesses each year? New research from Reckon puts the figure at a hefty $20.16 billion. For individual businesses, that’s an average of 541 hours spent on admin tasks, and $14,857 in lost income.

How admin pressures affect your bottom line

According to the report, many small business owners are so bogged down by admin pressures they’re neglecting sleep.

Those surveyed admitted to getting an average of 4.5 hours per night, considerably lower than the recommended amount of 7 to 9 hours. And 13% of respondents said they were up before 6am working on admin and payroll. 

It’s unsurprising then that so many were prone to slip-ups while on the job. 58% admitted to making an error which has negatively impacted their business’ bottom line, such as overpaying or underpaying a supplier or employee, or transferring to the wrong bank account.

Mistakes caused by admin pressures

  • 20% of respondents had over/underpaid an employee
  • 19% of respondents had over/underpaid a supplier or vendor
  • 18% of respondents had transferred money to the wrong person
  • 25% of respondents had made other errors which had cost them money

Perhaps most concerning, the nitty gritty of running a business is also whittling away at owners’ enthusiasm. Nearly half of all respondents said the amount of admin and red tape they have to deal with is “killing the dream” which led them to start their business in the first place.

What’s the solution?

The report suggests that mounting admin pressures can be managed by restructuring your day to allow for more ‘in the zone’ time, that is, the time when you’re operating at your peak.

Business owners who spent more time in this state spent 17% less time on admin and payroll expenses than others, saving them an average of $3,385 per year.

“Those that can streamline work for peak performance are not only more profitable, but they can invest more time and money in staff, marketing and innovation, to get ahead of the competition,” said Reckon CEO Sam Allert.

Ways small business owners can get in the zone

  • Introduce strict routines to your workday
  • Get the most difficult tasks out of the way first thing in the morning
  • Eliminate distractions such as phones and email
  • Take up mindfulness practices like meditation

Another good idea is to choose the right business bank account. And to spare yourself the headache of monthly fees, you can always opt for a fee-free account. Check out the options below or head to our business bank account comparison page for a more comprehensive overview.

And if you’re after some reading to give you an edge over the competition, be sure to check out our business banking hub for news and advice.

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