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How small businesses can use emerging technologies to cut down admin

March 13, 2018 • General, Opinion

How small businesses can use emerging technologies to cut down admin

Pieter Bensch Executive Vice President, Africa & Middle East at Sage.

In addition to giving businesses time and money back, think about what an injection of productivity could do for the African economy; better pay packets for everyone, more tax revenues for social spending, and perhaps most importantly, an improved work/life balance for small business owners across the board.

Many African entrepreneurs work longer hours during the week. South African entrepreneurs, for example, work more than 70 hours per week, sacrifice their public holidays and weekends, and take few days off each year. Yet our productivity research shows that Small & Medium Businesses in South Africa spend an average of 202 working days per year on admin tasks, accounting for around 3.7% of their total manpower.

Our live tracker shows that productivity losses caused by unnecessary admin are costing South African businesses R231 every second of the day – adding up to a cost of more than R1.4 billion for 2018 to date.

Giving time back should be a priority

Giving precious time back to business builders, the job creators and heroes of the economy should thus be a priority for governments and big businesses all over the world. It is shocking that despite the incredible technological advancements of the 21st century, so many business builders are still burdened by unnecessary admin.

We live in an age of miracles, of driverless cars and artificial intelligence, yet South African Small & Medium Businesses are spending an average of 1,616 hours a year on mundane tasks like generating invoices, paying taxes, chasing payments and issuing payslips. So, what can be done to help alleviate this problem?

Looking specifically at unnecessary admin – it’s not about keeping business taxes low and competitive, but reducing the admin burden on small businesses when it comes to compliance. Digitisation of tax filing and company registrations has worked well, saving local businesses plenty of time, but more could be done to streamline processes such as tax clearance certificates.

Less sweat, better outcomes

Emerging technologies like artificial intelligence, collective intelligence and open data can also play a substantial role in the longer term to help cut down admin. But with low levels of automation in HR, talent acquisition and chasing late payments, businesses could do more to digitise processes. We need to ensure they have access to training, so they have the right skills to exploit the efficiencies these technologies can bring.

Larger businesses and government could help small businesses in the transition to digital. The finance minister’s upcoming budget speech could be a perfect platform for government to discuss opportunities around small businesses, technology and productivity. These could include subsidisation of new technologies, simpler procurement through digital platforms, prompt payment of small suppliers or clearer guidance demonstrating how the use of such technology will improve their cashflow.

As Henry Ford said: “Improved productivity means less human sweat, not more.” Let’s make this the year that we finally crack the productivity puzzle, and give small business owners some valuable time back, so they can continue to do what they love. Because when business builders do well, we all do.

By Pieter Bensch Executive Vice President, Africa & Middle East at Sage

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