UK SMEs upbeat but finance admin slows growth plans

Monzo Business has published its first Money Moves Report on UK small and medium-sized enterprises, finding that 56% of SMEs are confident about growth over the next year.

The findings highlight a gap between rising spending on software and the time businesses still devote to routine finance work. Monzo Business customer data showed software spending rose 15% over the past year, yet 37% of SMEs said they were spending more time on financial administration than a year earlier.

Businesses reported losing an average of 53 minutes each working day to tasks such as processing invoices and expenses. Almost half, or 49%, said financial administration takes too long, while 39% said it is holding their business back from growing.

That burden appears to shape wider business decisions. Among those surveyed, 21% said administrative demands limited opportunities to invest in technology, equipment or premises, 20% said they hindered moves into new markets, and 18% said they affected hiring.

Growth plans

Despite those pressures, many firms still expect to expand. Nearly two-thirds of SMEs, or 62%, said they plan or hope to increase headcount over the next year.

Cost pressures remain the main constraint. Rising costs were cited by 46% of respondents as one of the biggest barriers to growth over the next year, followed by economic uncertainty at 33% and the tax burden at 26%.

Monzo Business customer spending data also showed bills rose 12% over the past year, while transport spending was flat. The findings suggest businesses are balancing investment in digital tools with higher running costs elsewhere.

Admin burden

Financial administration emerged as a central operational problem rather than a minor inefficiency. Nearly two-thirds of respondents, or 63%, said simpler financial administration would free up time to focus on strategy, sales and customer relationships.

When asked how that time would be used, 33% said they would pursue new customers or markets, 31% said they would invest in equipment, technology or premises, and 26% said they would hire new staff.

The survey also found frustration with banking services. Only 24% agreed that their bank actively helps them run their business rather than simply holding their money, while 55% said they often need other tools because their bank does not offer everything required to manage finances.

This suggests many smaller companies rely on a fragmented set-up, with financial tasks split across banking apps, accounting software and manual processes. Increased spending on software has not yet translated into less time spent on back-office work for a sizeable share of firms.

Monzo Business now serves more than one million business customers and supports one in six UK businesses. The report was based on an online survey of 1,000 owners and senior decision-makers at UK businesses with fewer than 250 employees.

Strand Partners conducted the research among respondents with authority over banking and financial tools at their businesses. The sample was weighted to reflect the wider SME population by business size, sector and region.

"Small businesses are confident about the year ahead and thinking about how they can grow. However, running a business still comes with far too much financial admin, and our research shows that this isn't simply an inconvenience - it can take time away from growth," said Jordan Shwide, General Manager at Monzo Business.

"At Monzo Business, we want to be a partner in that growth, making business banking simpler and giving owners the tools to spend less time on admin and more time building their business."