UK small businesses are spending more on software - but also spending more time on admin

A recent Monzo Business report has revealed that despite economic headwinds, UK small and medium businesses (SMBs) are still investing more in software, with spending on tech tools increasing by 15% over the past year. However, this surge in technology spending comes with a trade-off, as SMBs are also spending an average of 53 minutes every working day on financial administration tasks, such as processing invoices and expenses.

Despite these challenges, more than half (56%) of UK SMBs remain confident about their growth prospects over the next year, with nearly two-thirds (62%) planning or hoping to expand their teams. The research, based on a survey of a thousand SMBs across the UK, found that rising costs (46%), economic uncertainty (33%), and the tax burden (26%) are the main barriers to growth.

Financial admin has proven to be another significant obstacle, with nearly half (49%) of businesses stating that it takes too long and is holding their businesses back from growing.

Nearly half (49%) of the surveyed businesses said that financial admin is too time-consuming, and 39% believed it actively hindered their growth. This has led to some businesses missing out on opportunities to invest in other areas, such as new technology, equipment, premises, expanding into new markets, and hiring staff.

According to Jordan Shwide, General Manager at Monzo Business, while SMBs are optimistic about the year ahead and their growth potential, the significant financial admin time is a major issue. Shwide noted that while small businesses are confident about the future, the current level of financial admin is far too time-consuming and not just an inconvenience but can take time away from growth.