Research by Reckon has revealed small business owners are feeling the stress of compliance as the July 1 deadline for compulsory single touch payroll reporting approaches.
Half of the business owners canvassed for Reckon’s ‘In the Zone’ study confirmed they are already sacrificing health and wellbeing in order to stay on top of the admin tasks required to remain compliant. Many expressed concerns over how they will manage to adopt STP – the biggest compliance change for small business owners since the introduction of GST.
This financial and emotional burden is taking its toll on both businesses and owners alike. The research revealed the weight of administration and red tape is costing small businesses an average of 541 hours in time, and $14,857 in money each year.
Over a fifth, (22 per cent) of small business owners said that the pressure of admin makes it hard for them to get ‘in the zone’ and do their best work to succeed and grow their business.
The report suggested per week, many spend more time on administration and payroll (at an average of 10 or more hours) than operating at their peak.
Reckon CEO, Sam Allert said distractions such as worrying about admin, payroll and compliance are impacting work efficiency.
“Yet those that can streamline work for peak performance are not only more profitable, but they can invest more time and money in staff, marketing and innovation, to get ahead of the competition,” said Allert.
Shockingly, 84 per cent of small business owners surveyed said they would make a lifestyle sacrifice because of admin workload or requirements, with 50 per cent specifically saying they would sacrifice their wellbeing, including sleep.
With the average business owner already operating on as little as 4.5 hours sleep per night, additional compliance measures could see the nation’s SMB owners further sleep deprived.
Additionally, the research found that the pressure of administrative tasks and red tape has caused 58 per cent of small business leaders to make an error that has had a financial implication, such as over or underpaying a supplier or employee or transferring payments to the wrong person.
Concerningly, ahead of the STP requirements, 21 per cent or 659,000 of small business owners in Australia don’t believe or don’t know if their business meets all existing compliance requirements, let alone upcoming changes from 1 July. Around a quarter (24 per cent) also admit that they do not currently use an accounting and payroll software, which is a pre-requisite to getting STP-compliant with the ATO.