Sweating the Small Stuff: Why We Need to Care About the Burden of Admin

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Imagine what your business could do with an extra 120 days a year?

It might sound like a fantasy, but it’s really not. In a Sage survey of over 3,000 small and medium-businesses (SMBs) from over the summer, we found that the average business spends this much time per year doing administrative work.

Based on a seven-hour working day, that’s a massive 840 hours—or 50,400 minutes—of generating invoices, paying taxes, chasing payments—I could go on. Reducing this administrative burden is something that’s in all of our interests, not just small business owners themselves.

That’s because reducing the pain of admin could help startups survive for longer. Getting startups to turn into scale-ups has become something of a holy grail for many economies around the world, and Canada is no different. Additionally, SMBs are the drivers of our economy, accounting for the largest proportion of GDP and employment in the country.

While startup survival rates differ across markets and sectors, the proportion of early stage companies that crash and burn in the first 12 months is over half almost everywhere. And the burden of admin, or more specifically, the fact that time spent doing it would be better spent investing in growth, is commonly cited as one of the top reasons why.

The ‘admin problem’ is ultimately the same question as that other million-dollar question that economists around the world are struggling to crack: the so-called productivity problem.

Canada’s productivity growth has been in decline since the 1970s, according to the Conference Board of Canada. An increase in productivity of just five per cent could lead to an increase in national GDP of at least $500 billion CAD per year.

If we could redirect hours spent on mindless administrative tasks back into attracting customers and raising revenues, we could make real headway in closing this gap.

So what are the main culprits of this admin burden, and how can we wipe them out? Sage’s research showed that accountancy was the top offender in Canada, taking up 21 per cent of all time spent on admin. Generating invoices and processing payments came in at second with 18 per cent while complying with tax regulations and talent acquisition tied for third (12 per cent).

As businesses become more digitally savvy, the opportunity for technology to take over much of this admin drain is huge. But our data showed this digital shift is happening slower than expected.

While 59 per cent of Canadian SMBs said that they had either partially or fully digitized their accounting, at least 31 per cent still have no software solution in place at all. Those without this tech in place listed worries about cost and the complexity of finding their way around new systems as the top reasons.

Technology is the key to unlocking this elusive extra $500 billion a year from our nation’s businesses. By investing in administrative resources, Canadian business builders can shorten the amount of time it takes to get paid and eliminate the risk of clients never paying their invoices—saving them both time and money so they can focus on growing their businesses.

Solve the admin problem, and those 120 extra days could be a reality. How would you use them?

Paul Struthers is the EVP and managing director of Sage Canada.

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