If more British SMEs adopted digital finance tools, their growth could add around £25.3 billion to the economy, according to new research from Starling Bank.
The digital bank said that rolling out these tools would also help to close the productivity gap with countries such as France and Germany.
SMEs account for around 99 per cent of business in the UK and spend an average of £63,000 each year managing their finances, according to Starling’s study of around 1,000 businesses.
While 84 per cent of SMEs already use digital tools for some financial tasks, Starling’s research found nearly half do not expect to increase their usage as they feel stuck due to entrenched processes and cost concerns.
Where digital tools are used for financial tasks, Starling said SMEs report an average time saving of 41per cent over manual processes.
An economic gain of £25.3 billion is almost double the economic contribution of the UK’s agriculture sector, which Starling said indicates how important it is to help SMEs adopt new technology.
The bank said that if more businesses were to use digital solutions for routine tasks such as bookkeeping, invoicing and tax returns, they could use the time and money saved to innovate and to seek new customers.
“Small businesses are the backbone of the British economy, but they are being held back by a ‘hidden tax’ on their time,” said Adeel Hyder, managing director of SME banking at Starling Bank. “Our research shows that a large number of SMEs believe digital tax software alone costs nearly £12,000 a year, when in reality, that’s fifteen times the price of some high-end solutions.”
