SMEs spend too much time on tax, experts say

21 June, 2010

Small businesses need to embrace technology so they can reduce the amount of time they spend preparing their quarterly and end-of-year tax statements experts have warned. 

A survey of 515 business owners which was commissioned by American Express and conducted by Galaxy Research has found a majority of SMEs spend one Sunday per month devoted to looking over their tax. In addition, over 40 percent of small business owners spend their nights fulfilling financial reporting obligations, with a majority losing 60 hours per year to tax issues.

The survey revealed that 60 percent of small business owners are responsible for their tax statements, while 21 percent use external accountants, 12 percent use family members and 9 percent use a bookkeeper or finance manager employed by the business.

The study also reveals that more than 50 percent of business owners would devote more time to personal and recreational activities if they could save time on tax, 43 percent would spend more time with family and 36 percent would use that time to improve their businesses.

American Express head of small business services Australia, Jason Fryer, says simple technology like accounting software and even credit cards are tools often overlooked.

"The report clearly shows a lot of small owners are drowning in a sea of receipts and paperwork when it comes to end-of-year reporting. One Sunday a month is a huge amount of time - time which business owners could be spending  improving their business."

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