It’s the situation small companies owners dread: being bogged down with admin when all you want to do is work on your core offering.
Figures released by Tide show that most entrepreneurs (63 per cent) running young companies spend at least one day every month on administrative financial tasks, such as setting up bank accounts, tax calculations, invoices and expenses.
The company spoke with 149 small business owners and sole traders in the UK about their experiences of small business banking and of managing their finances. In all, more than one third (36 per cent) of respondents rate the help and support received from their bank when setting up an account as poor or very poor, while two thirds (67 per cent) say they aren’t likely to recommend their current business bank to others.
Furthermore, almost half (47 per cent) of respondents feel the service they’d received from their bank after becoming a customer was ‘poor’ or ‘very poor’, and 36 per cent say they were dissatisfied with how easy their business bank account was to use.
George Bevis, CEO of Tide says the UK’s economy is founded on the success of small businesses, but many simply have not been receiving the help and support from banks that they need.
‘In the early days of starting a new business, entrepreneurs and sole traders all too easily find themselves tied up in financial red tape. And while the tasks they have to complete aren’t necessarily complicated, they are time-consuming and unfamiliar, and there can be significant consequences if done incorrectly. With modern technology, there is no reason why banks can’t help their customers to navigate these waters more efficiently and save them time, but they simply aren’t doing so.’
A host of admin pains
Respondents also reveal their most significant frustrations and challenges in managing their company’s finances. Topping the list is tax calculations (a challenge for 54 per cent of those surveyed), followed by accounting (51 per cent), keeping track of expenses (49 per cent), having to use multiple applications to manage different services (38 per cent), invoicing (30 per cent), and payroll (18 per cent).
Companies less than a year old are more likely to struggle with tax (60 per cent) and accounting (59 per cent) issues, whereas companies that have been operational for longer are more challenged by responsibilities such as payroll (a problem for 27 per cent of companies between 1-5 years old) and keeping track of expenses (55 per cent).
Those surveyed were also asked what features are most important in choosing a banking provider. The top five are easy internet banking (listed by 80 per cent), a good mobile app (66 per cent), free transactions (54 per cent), speed of set up (39 per cent), and the length of the free banking period (36 per cent).
Conversely, some traditional strengths offered by the banking sector, such as having a local branch (5 per cent), offering an overdraft (10 per cent) or telephone support (16 per cent) are seen as unimportant, while not a single respondent said that the provision of a chequebook would be a factor in their choice.
Further reading on business banking
