Banking red tape cost 880,000 of Australia’s two million small and medium enterprises (SMEs) an average of four weeks’ productive time a year, costing the economy $7 billion, according to research from banking firm Tyro.
Tyro’s ‘Exploring banking inefficiencies for SMEs’ report found that 44 per cent of Australian SMEs spend more than three hours every week checking, entering, paying for and reconciling data, costing each business an average of $7,800 a year.
“SMEs are drowning under the burden of inefficient online business banking processes that are robbing them of three hours a week, or 20 days a year,” Tyro CEO Jost Stollmann said. “This means SMEs have to work a 13-month year, or give up the equivalent of four weeks’ annual holiday to compensate for banking inefficiencies. “It’s clear that business banking requires a rethink. It needs to be mobile, embedded into business and accounting software and fully automated.”
Mr Stollmann added that Australia should be helping their SMEs, which make up such a large part of the national economy.
“Australia should be looking at action to improve SME productivity, in recognition of the changing terms of trade and resources decline,” he said. “We should help SMEs operate more efficiently.”