A failure to use technology to manage their businesses is costing Irish small enterprises an estimated €3 billion annually, a new survey has found.
Around 60 per cent of small companies fail in their first five years, many because they do not have proper accounting and invoicing systems.
A survey by business software developer Sage, published on Monday, estimates that using technology to manage cash, invoices and administration could save such businesses €3 billion a year.
However, Sage's chief executive for the Republic and UK, Alan Laing, believes that too many small companies still use ad hoc systems for recording invoices and receipts, giving them no control over their cash flows.
“There are still too many of them putting their receipts in shoeboxes and then going over them at the weekend,” he said, adding that this left them with no clear picture of how much they were earning and how much they were spending.
Mr Laing argued that small businesses could buy relatively cheap systems that would allow them to record and manage income and outgoings as they happen. As an example, he explained that people working for a plumbing business could use such systems to record the time they spend on site and other costs on their mobile phones.
This information can then be transmitted directly back to the office, where it is stored and easily accessed.
Sage’s “Sweating the Small Stuff” survey on the impact of the bureaucracy burden, shows that fewer than a quarter of businesses have “fully digitised” their most burdensome tasks: accounting and invoice processing.
A further 25 per cent use some form of dedicated accounting software, but nearly half are still managing these tasks without any form of technology. The study, by Plum Consulting, notes that the work accounted for 5 per cent of small businesses’ manpower.