Thriday 2020 SME Banking, Accounting & Financial Management Report

February 20, 2024
minutes to read
Michael Nuciforo
Table of Contents

We’re very pleased to present the inaugural Thriday 2020 SME Banking, Accounting & Financial Management Report for your review. This report provides one of the most comprehensive studies ever conducted on the financial management practices of Small and Medium Enterprises (SME) in Australia. The survey of 180 SMEs, which was conducted in February and March this year, sheds a fascinating light on the tasks, time spent and challenges business owners face in keeping on top of their finances.

The role of a small business owner has always been a demanding one. Make no mistake, running a small business is hard. From the business owners who wake up well before dawn to open their stores, to those that burn the midnight oil long after the kids have gone to bed.  The dynamic nature of modern business ensures that SMEs remain in a constant flux of dealing with emerging competitors, new technologies and exciting global opportunities. Due to this, Australia’s 2.3 million SME business owners work longer hours, take less leave and suffer from more stress. 

Why did you start your own business?

"Because it was an area where I could do the things I love by interviewing actors and selling autographed photos all over the world."

Male, 51-60 years old, Sole Trader

One of the biggest contributors to this lack of work/life balance is the time spent on financial admin. Even though good financial management is cited by 58% of business owners as the number one factor in running a successful business, many business owners struggle with the time involved in doing it correctly. It’s apparent from the research that accounting packages, accountants and bookkeepers are not completely fulfilling the financial needs of SME’s. Those that use these resources and tools still report spending a significant amount of time and money on managing their finances.

What don’t you like about your accounting package?

"It is very counterintuitive. It links to my bank which is great but to actually document all my expenses for the month takes me a really long time. I believe it could be much simpler! There are way too many features for a small team biz."

Male, 31 - 40 years old, Company

As the world deals with the fallout from the COVID-19 pandemic, small businesses will be required to change. They will need to emerge more digital, more connected, and more efficient with how they operate. Given this, business owners are increasingly realising that to avoid getting swamped, they need to leverage new digital solutions that can address these significant pain points, reduce repetitive, time consuming tasks and also provide insight via a deeper understanding of their business.

The key highlights from the report are:

  • ‘Greater flexibility’ is the primary motivation for starting a business.  But due to the high amount of admin and compliance tasks, business owners are frequently distracted from their core business activities by the amount of financial administration they must complete.
  • SME’s recognise that ‘good financial management’ is the number one factor in running a successful business. But when ranked against other common business activities, financial admin is unsurprisingly the most frustrating task to complete.
  • Astonishingly, Thriday found that small business owners are spending an average of 6 hours and 19 minutes per week on financial admin tasks such as paying bills, chasing unpaid invoices, and reconciling transactions. This equates to over 40 working days per year in wasted productivity.
  • Internet Banking remains by far the most popular way to manage finances with 86% of SME’s confirming that this is the most common digital application they use.
  • Contrary to popular opinion, the take up of accounting packages such as MYOB and Xero is only around 47%.  
  • When asked why they chose not to use an accounting package many respondents stated it was unnecessary or they just preferred to do it on their own. This indicates that businesses feel existing solutions require too much manual intervention and they might as well manage it themselves.
  • Even though businesses are spending a significant amount of money on accountants and bookkeepers, there is still a feeling that the problem isn’t solved. The relationship with an accountant is generally limited to one interaction a year at tax time.
  • The traditional walls between banking, bookkeeping, accounting and tax are inefficient and no longer applicable. These artificial boundaries can be removed through the better use of data and the application of machine learning and data science to turn financial admin into a real value-add. 

You can download the full report here at the bottom of this page.

Business owners have generally leveraged their own expertise to build a successful and sustainable business. And whilst they are experts in their own product or service, they don’t have the time or inclination to become financial admin experts as well. They have enough on their plate managing the day-to-day operations of their business. 

What do you find most frustrating about financial admin?

The time it takes to do them sometimes takes me away from my core business activities, growing my business and improving my productivity/ profits.

Female, 31 to 40 years old, Sole Trader

Since the launch of Internet Banking and the first accounting packages in the late 1990’s, businesses have increasingly gone digital to help streamline their financial activities. Many business owners recognise that digital solutions have the potential to save time, address significant pain points, and also provide insight to bolster performance.

What do you find most frustrating about financial admin?

“We aren't taught anything about it (finance) at school to prepare us so it was all new and hard to learn.”

Female, 21-30 years old, Company

We established Thriday last year to help Aussie business owners solve this very problem. Our integrated business banking, accounting and tax solution acts as the financial operating system of a business. In doing so, Thriday automates and simplifies the bulk of financial admin tasks, saving time, increasing productivity, improving accuracy and helping SME’s grow and succeed through better financial management. 

How would you improve your banking experience?

They’re too old school. Need to go into the branch to do basic stuff that you should be able to do online or over the phone.

Male, 21 - 30 years old, Company

When we commissioned this survey with leading research group Qualtrics, we wanted to build up a comprehensive picture of all the financial admin tasks that a business conducts, what challenges they have with these tasks and how much time and money it takes to do. This comprehensive report answers those questions and exposes the inefficiency of the financial procedures that many SME’s suffer from today.

A thriving SME sector is vital to the health of the Australian economy. SME’s drive growth, employment and innovation.  The results from this research are clear, SME productivity is impacted significantly by the time and money spent on managing finances and it’s time for something new to solve this once and for all.

DISCLAIMER: Team Thrive Pty Ltd ABN 15 637 676 496 (Thriday) is an authorised representative (No.1297601) of Regional Australia Bank ABN 21 087 650 360  AFSL 241167 (Regional Australia Bank).  Regional Australia Bank is the issuer of the transaction account and debit card available through Thriday. Any information provided by Thriday is general in nature and does not take into account your personal situation. You should consider whether Thriday is appropriate for you.

Why waste time on financial admin when Thriday can do it for you?

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