Sage, a market leader in cloud accounting software today unveild an economic report highlighting that the world’s business builders currently spend an average of 120 working-days per year on administrative tasks, accounting for around 5 percent of the total manpower for the average Small & Medium Businesses.
The study, titled ‘Sweating the Small Stuff: the impact of the bureaucracy burden’, which covered over 3,000 business builders globally with over 250 of them based in neighbouring Singapore, revealed that complying with administrative and regulatory requirements has a significant impact on businesses both in terms of manpower that must be devoted to the tasks and actual cost to the bottom line.
While the survey does not offer numbers from Malaysia-based businesses, the findings from Singapore and other countries resonate strongly amongst local business builders. According to the study, Singapore Small & Medium Businesses spend 168 working days on these tasks, which costs them RM 480,000 (SGD 160,000) a year, far higher than the average of RM 240,000 spent by SMEs globally.
The research also indicates that an increase in productivity of as little as 5 percent in Singapore could lead to an increase in GDP of SGD8.7 billion (RM 26 billion). This could be partially achieved through the reduction of time spent on business administration.
Sage Asia Vice-President and Managing Director Robin Chao commented, “The amount of time that business builders spend on administrative tasks is significant – over a third of the whole work year! Imagine what our local businesses can achieve if they are able to invest even a portion of this time in innovation or training. Cloud-based software solutions can help businesses cut back on and streamline administrative processes, allowing business builders to manage company finances, human resources, and much more while on-the-go. Technology can help these business leaders be more efficient and cut down on unnecessary admin time.”
“The productivity puzzle is no doubt tough to crack. The Malaysian Government has demonstrated its willingness to tackle it head-on by launching the Malaysia Productivity Blueprint,” Chao continued. “The time has come for all business builders in Malaysia, big and small, to also take action by either digitally automating or streamlining the administrative work that needs to be done.”
Across all the different types of Small & Medium Businesses, accounting is the biggest administrative task. Invoicing activities, including both invoice generation and processing of invoices received, also represent a substantial proportion of total administrative tasks. Together, these three tasks make up around 41 percent, 46 percent and 51 percent of all administrative activities for medium-sized, small and micro firms respectively. They are also the three tasks that can be carried out much more efficiently using software.
Markets covered by the Sage commissioned survey include Australia, Brazil, Canada, France, Germany, Ireland, Singapore, South Africa, Spain, the UK and US. Sage has over 3 million customers – small and medium sized enterprises in 23 countries, including the surveyed regions. Based on data from the report, Sage has also launched a real-time ‘Cost of Lost Productivity’ tracker, to help businesses better visualize the impact of administrative burdens on their bottom line.