UK small and medium-sized businesses spend an average of 53 minutes of every working day on financial administration, despite increasing their spending on software intended to support day-to-day operations.
The first Money Moves Report from Monzo Business found that 39% of SMEs believe financial administration actively holds back their growth, while 49% said it takes too much time.
The research also found relatively strong intentions to expand. Some 56% of respondents said they were confident about their growth prospects during the next year, and 62% planned or hoped to increase employee numbers.
Those ambitions are being balanced against higher operating costs and economic uncertainty. Rising costs were identified as a barrier to growth by 46% of respondents, followed by economic uncertainty at 33% and the tax burden at 26%.
Jordan Shwide, general manager at Monzo Business, said: “Small businesses are confident about the year ahead and thinking about how they can grow.”
The survey was conducted by Strand Partners among 1,000 owners and senior decision-makers at UK businesses with fewer than 250 employees. Respondents had responsibility for banking and financial tools, and the sample was weighted by company size, sector, and region.
Monzo supplemented the survey with spending data from its own business customers. That behavioural data showed spending on software rising by 15% over the past year, while bills increased by 12% and transport spending remained broadly flat.
The two datasets measure different things. The survey records what sampled SME decision-makers say about their businesses, while the spending figures reflect transactions among Monzo customers. Together, they show a gap between greater spending on digital tools and the amount of administrative work many businesses say they still undertake.
More than a third of SMEs surveyed, 37%, said they were spending more time on financial administration than a year earlier despite the increase in software spending recorded through Monzo’s customer data.
Businesses attributed practical consequences to the workload. Among respondents, 21% said financial administration prevented or delayed investment in technology, equipment, or premises. A further 20% connected the burden to missed opportunities to pursue new markets, while 18% said it affected hiring.
Nearly two-thirds, 63%, said simpler financial administration would give them more time for strategy, sales, and customer relationships. Asked how they would use additional time, 33% said they would pursue new customers or markets, 31% would invest in equipment, technology, or premises, and 26% would hire staff.
The findings help explain why business software providers and banks are increasingly competing over workflows rather than individual financial products. An SME may use a current account from one provider, bookkeeping software from another, separate payroll and expense systems, card products, invoicing tools, tax software, and external accountants.
Each system can automate part of a process while still creating work when information has to be transferred, reconciled, approved, corrected, or re-entered elsewhere. Buying more software does not automatically reduce administrative time if the underlying workflow remains fragmented.
The issue can be particularly acute for smaller companies, where administrative responsibility often sits with founders or senior managers rather than specialist finance teams. Time spent processing invoices, checking expenses, reconciling transactions, or preparing information for an accountant can displace work on customers, sales, recruitment, or operations.
The Monzo research also found dissatisfaction with the breadth of support available through business banking. Only 24% agreed their bank actively helped them run their company rather than primarily holding their money, while 55% said they frequently relied on additional tools because their bank did not provide everything they needed to manage finances.
Digital banks and fintech companies have consequently widened business banking products to include invoicing, expense management, tax calculations, savings tools, payments, and accounting integrations as they compete for SME relationships that historically centred on deposits, lending, and transactions.
Monzo Business serves more than one million customers and has a commercial interest in demand for integrated financial tools. The report therefore does not establish that any individual banking platform reduces the reported 53-minute burden.
It does identify a persistent operating problem: many SMEs are increasing technology expenditure while a sizeable proportion say the time required for financial administration is rising rather than falling.
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