WHAT could your business achieve with an extra 168 working days a year?
That's how much time is currently spent on admin, causing Singapore businesses to lose a staggering S$8.7 billion worth of productive business time annually. As at end-January 2018, the cost of lost productivity already stands at S$707 million.
Although the Singapore economy is on the uptick, business builders have had to grapple with a wide range of challenges, including late payments and cashflow issues. Dealing with admin issues keeps organisations from focusing on their core business, and from tasks like talent development and innovation that are crucial to keeping up with the competition.
Many leaders are also seeing productivity as an important issue to be addressed. Monetary Authority of Singapore managing director Ravi Menon recently warned that we need to boost productivity growth, despite seemingly healthy economic growth in the last year.
The biggest question that remains is how businesses can cut back on admin and free up some of these 168 extra days.
The numbers tell all
This data comes from Sage's Sweating the Small Stuff: the impact of the bureaucracy burden report, where we surveyed over 250 local business leaders in Singapore and over 3,000 across the world. Unsurprisingly, we found that the effort needed to comply with administrative and regulatory requirements not only takes up manpower, but also negatively affects the bottom line.
Worryingly, not only are Singapore businesses losing S$8.7 billion worth of productive business time annually, but this figure is twice the global average. This suggests far lower productivity as compared to countries like Australia.
Across the board, small and medium-sized businesses in all industries spend the most time on accounting as well as invoice generation and processing, making up to 51 per cent of all administrative activities for local businesses.
Closing the productivity gap
Although admin tasks are mundane, they are still essential for business builders to meet their goals and get paid. More needs to be done to minimise the amount of time spent on admin tasks. If even some of those 168 days can be redirected to attracting customers and growing revenue instead, it would be a positive step towards closing the productivity gap.
Companies can save at least a part of this time if they streamline processes, adopt digital tools and cut back on unnecessary admin.
Among these, digitalisation is a critical enabler in reducing the burden of admin. Through our research, we have found that in general, as digitalisation increases, costs of admin fall. In particular, time spent on accounting can be significantly improved by the adoption of digital tools.
For example, e-invoicing and online/mobile accounting systems can greatly help to ease the admin burden, by automating paper-intensive and manual invoice settlement processes. Aside from benefiting from a more efficient allocation of manpower and time, these solutions allow business builders to manage their cash-flow in real-time, affording them better financial visibility and less reliance on external financing.
Greater productivity needed to fulfil business dreams
Still, many business leaders today seem reluctant to adopt tech to boost admin productivity, with Singapore companies being some of the least likely to adopt tech tools, among countries surveyed. Many cite cost of implementation as the greatest barrier to adoption.
However, there are many measures in Singapore that can help SMEs to get started on their digitalisation journey. One is the SMEs Go Digital Programme, led by Spring Singapore and the Infocomm Media Development Authority. Through the programme, various initiatives have been rolled out, such as the establishment of SME Centres to provide in-person advice for their tech needs.
Another initiative is the list of pre-approved digital solutions, which have been proven to be robust and can meet SMEs' business needs. This pre-approval can help to alleviate business leaders' concerns about their investments in tech tools.
Imagine the possibilities for growth if we can take the time spent on admin to fulfil business goals instead. No business leader ever started out dreaming of filling out paper work or chasing for invoices to be paid - but these are still necessary to helping them achieve their mission. We need to do more to help our local business leaders focus on the real, valuable work that contributes to their bottom line.
- The writer is vice-president of Sage Asia