Micro businesses and freelancers are spending the equivalent of 2.5 million working days managing their finances, a survey by KashFlow has reported.
Of the 5.3 million micro businesses in the UK, the survey reported that 53% are constantly worried they’ve made a mistake concerning their business’ accounts. 43% said they feel frustrated with themselves as a result.
When micro businesses and sole traders were asked what they believe to be the most appealing aspects of running their own business, 48% quoted being your own boss and not having to answer to anyone as the most attractive aspect. On the least appealing aspects, a fifth said being unable to switch off was the worst, while 15% of respondents said managing business finances was the worst aspect of being a small business owner.
While many said they struggle with their own accounts and lack confidence when completing them, there were others who felt differently. 35% of respondents said they feel ‘in control’ when managing their business finances, while 42% rated themselves ‘really good’ at managing their business finances and ‘totally confident in their abilities’.
However, for those who did not feel confident, the general consensus is to turn to help. 25% of respondents said they rely heavily on either their family, friends or on an accountant for help when they are struggling.
Oliver Shaw, CEO of KashFlow, said: “It’s clear that even those who feel confident managing their accounts still find it challenging at times, and that the overwhelming majority of sole traders and small business owners would like to spend less time on it.
“Although half a day a month sounds reasonable for such a task, almost a third of those surveyed are spending longer than that, which is time they could be spending on doing what they love or, exploring growth opportunities.”
How to claim back your time
If you’re one of those who struggle to manage small business finances, there are steps you can take to both help you learn about your accounts and free up your time. The first step is to get yourself set up on a cheap and simple bookkeeping software.
This will allow you to maintain your independence by allowing you to continue to manage your own accounts while still gaining a level of support for when you come up against an obstacle. The majority of online bookkeeping software will offer either online or over the support, so if you’re worried you’ve made a mistake you can check out one of the guides that can help you manage your accounts effectively.
Choosing an accountant
If you’re still unsure on how to manage your accounts, and don’t feel comfortable doing it yourself, the best step to take is to invest in advice from an accountant. They will be able to guide you to the best options for your business, and help you become as tax efficient as possible.
There are plenty of options to choose from when it comes to picking an accountant. The main options you’ll need to decide is what kind of accountant will be best for you; a local accountant, an online accountant or an accountant who specialises in one area. To help you decide, here’s summary of what each type of accountant can offer you.
Local accountants are those who have a physical office you can go to for a face-to-face visit with your accountant. These will be best for those who struggle to understand their accounts, and wish to have a close relationship with their accountant to help them understand how they manage their own accounts in the future.
If you’ve been managing your own accounts until now but wish to pass over the responsibility to free up your time, the best option for you may be an online accountant. With some knowledge of your accounts, you’ll be able to decide on the best deal for you and won’t require the same face-to-face contact for explanations of your accounts as people with less knowledge of their accounts.
If you run a specialist business or if you require specialist tax help that can only be provided from a specialist in your industry, you will require a specialist accountant. Often those requiring a specialist accountant will have a grasp of the needs of their own accounts and will be able to easily pass over their accounts and have an understanding of the processes required, being able to have minimal contact with your accountant.
How much time do you spend managing finances? You can reduce the amount of time you waste on accounts by automating processes with an online bookkeeping software like Pandle. You can have a look at all the processes Pandle can help you speed up here.