News

July 10, 2015

Business owners not billing for their time

Many micro-business owners are failing to track their time and aren't billing clients for all the work they do, according to new research.

A survey conducted by YouGov for FreeAgent has revealed that 63% of micro-business owners do not track or record any of their time. Just 8% of owners said that they track all of their time.

FreeAgent's own research also showed that for every hour billed by micro-businesses, they will on average work an additional 30 minutes of time that they don't charge for. This could amount to £11.4 billion a year in unbilled hours across the sector.

Ed Molyneux, ceo and co-founder of FreeAgent, said: "Our research reveals the extent to which these businesses are going the extra mile often without being paid. From our own internal data, we've discovered that for every hour a micro-business works and bills their clients for, they will on average work an additional 30 minutes that they could - but don't - charge for. That's a third of a typical micro-business owner's time where they're essentially working for free.

"But that's just the picture for those people who are actually recording their time in the first place. Our YouGov poll found that almost two thirds of respondents didn't actually track any of their working time, so that potentially means that millions of UK micro-business owners don't know how valuable their time is or how profitably they're using it."

In addition, the survey found that many small business owners are spending considerable time on jobs that they cannot charge clients for, including accounting.

It found that 23% of micro-business owners personally spend more than one full working day every month on their business accounts while nearly one in ten (8%) spend at least three full working days on them. In addition, 34% of respondents said they felt overwhelmed by their business accounting.

Ed Molyneux said: "The reality is that, although many micro-business owners work hard for their clients, they also spend long hours doing business-related tasks that they don't get paid for."

More on this topic:

• Are you making the best use of your time? BLOG
• Simple book-keeping GUIDE
• How to manage your time CHECKLIST