A new study of small businesses in 11 nations released today (September 12, 2017) suggests that time spent on administrative costs at a small business can represent up to 17% of total labor costs. The research was conducted by the consulting company Plum and commissioned by the accounting and financial software company, Sage. One reason for the high cost of administrative tasks is likely that 50% of small businesses do not use technology-based accounting and financial solutions.
Key Findings
5% | A 5% increase in small business productivity in the U.S. could lead to an increase of close to $325 billion in GDP.
17% | The percentage of manpower (time) spent by a small business on administrative tasks each year.
20% | Percentage of administrative time spent on accounting, the top administrative cost.
30% | Percentage of small businesses that manage their accounting digitally.
50% | Percentage of small businesses that have no accounting software solution in place at all.
When asked why they had not adopted technology-based tools to streamline their administrative tasks, the most common answers from small businesses were “nothing,” followed by “time-consuming,” and “implementation costs.”
Using technology to streamline administrative tasks
could have a significant, positive impact on an entire country’s GDP.
| Country | Percentage of time lost due to lack of digital tools. |
Implied loss in productivity (US Dollars) |
| UK | 5.6% | GBP $39.9 bn |
| South Africa | 3.7% | ZAR 7.3 bn |
| France | 7.7% | EUR 43.9 bn |
| Ireland | 3.5% | EUR 2.2 bn |
| Australia | 4.9% | AUD 31.8 bn |
| Brazil | 6.5% | BRL 79.5 bn |
| Canada | 1.7% | CAD 17.7 bn |
| Singapore | 5.5% | SGD 10.1 bn |
| Spain | 10.5% | EUR 32.0 bn |
| United States | 4.9% | USD 335.3 bn |
| Germany | 3.7% | EUR 28.2 bn |
Source: Sweating the Small Stuff: the impact of the bureaucracy burden