May 29, 2017

84 Percent of Small Businesses Rely on a Manual Process


84 Percent of Small Businesses Rely on a Manual Process

A handwritten message to your loyal customers — nice touch!

A handwritten invoice scribbled on a piece of paper — not so much.

But handwritten invoices are just one of many critical financial processes many small businesses are still doing manually.

Still Using a Manual Process

According to new data from Wakefield Research and Concur, 84 percent of small businesses rely on some kind of manual process every day.

At a time when automated¬†systems are typically free and readily available, it’s a shocking figure.

Let’s go through a time warp — back to the 20th Century — to see what old school technologies are still in use today.

Spreadsheets

Apps like Excel are still good for some small businesses and some professions. The average small business owner, who isn’t dedicated to accounting, isn’t one of them.

Still, 69 percent of small businesses use spreadsheets to plan their budgets and track their spending.

Rather than Excel, full-service accounting apps are widely available. They’re often ideal for small businesses where bookkeeping is put on the back burner.

These apps go another step further than ordinary spreadsheets. Many are equipped to provide real-time, easy-to-read financial info that makes decision making easier and smarter. They make the most of the data you enter.

Filing Cabinets

There was a time when everything was printed on paper. These papers were organized into manila folders and labeled. Bigger accounts got an accordion style folder.

These folders were stored — often alphabetically — in what’s known as a filing cabinet. They’re stacks of sliding drawers that often lock.

You could judge how big a business was — or how much paperwork it required — by the amount of filing cabinets a business had.

They’re not going away, though. Sixty percent of small businesses still keep their important files in a filing cabinet.

Ledger Book and Graph Paper

This same data found that 49 percent of small businesses use a “handwritten record to track, manage and analyze spend.”

If computer spreadsheets are still in fashion among small businesses, presumably the handwritten data is still collected in ledger books.

And that data analyzed on paper might be drawn out on graph paper. How else would you draw an accurate bar chart? The latest graphic design software, perhaps ?

If It’s Not Broke — No, It’s Broke

A stubborn small business owner clinging to these “technologies” will argue they haven’t failed to date.

Chances are, they’re wrong.

This reliance on handwritten data is, at the very least, causing unnecessary delays.

The Wakefield Research and Concur data showed that 42 percent of small businesses surveyed have errors in matching invoices to clients.

Another 42 percent say they’ve experienced errors reconciling invoices.

Delays Cost Money

Delays are a problem and they’re costly. ¬†Among businesses surveyed, 47 percent say they’ve experienced delays in processing vendor orders.

Forty-one percent say they’ve incurred late fees on payments that were lost in their handwritten mess.

Image: Small Business Trends

5 Comments ▼
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Joshua Sophy - Assistant Editor


Joshua Sophy Joshua Sophy is the Assistant Editor for Small Business Trends and the Head of Content Partnerships. A journalist with 17 years of experience in traditional and online media, Joshua got his start in the newspaper business in Pennsylvania. His experience includes being a beat reporter covering daily news. He eventually founded his own local newspaper, the Pottsville Free Press, covering his hometown. Joshua supervises the day-to-day operations of Small Business Trends' busy editorial department including the editorial calendar and outgoing assignments.

5 Reactions

  1. This is so true and reflects my experience as a business consultant to self employed and small business owners. Even simple actions like setting up folders in their email system to manage their contacts have gone a long way to prove efficiency.

  2. Aira Bongco

    This means that the human element is still important. This is the reason why employees are still essential in any business’ operation. Manual process comprises the larger percentage of the work.

  3. Tax Auditors still want paper… wrong audience for this story.

    • Tax auditors don’t want hand written data… and the IRS considers digital receipts and invoices no different than paper if you’re using legitimate bookkeeping software like Quickbooks.

  4. Yeah, it is true. Many small businesses still using paperwork system or spreadsheets to go through their daily business especially with their account related works.

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