Red Tape, compliance, licensing, regulations, call it what you will, it takes significant time and money to make sure that you are complying with all the different legislations which impact your business.
The Australian Chamber of Commerce and Industry has issued the 2014 National Red Tape Survey, which highlights just how costly this is.
One in four businesses is spending more than 11 hours per week on compliance.
Almost 50% of the respondents to the survey reported spending more than $10,000 on compliance. Costs which more than 50% said they couldn’t pass onto their customers.
The survey principally dealt with small businesses with 65% of the businesses surveyed having less than 20 employees.
To keep your costs to a minimum, there are 7 steps to consider:
- Automate your accounting system as much as possible. Consider using a cloud accounting system, which in most cases will reduce bookkeeping time by around 50%.
- Keep your accounting system up-to-date daily. Make sure that time is allocated everyday to reconciling bank accounts and credit cards.
- Put systems in place and document them with detailed and easy to follow procedures for all areas of compliance (including, but not limited to GST, Workplace Health & Safety, Employment legislation).
- Delegate the data entry and background work to someone experienced in each area.
- Put money aside each week to cover the costs so that you can pay on time.
- Make sure you are getting advice from experts.
- Quantify the time and cost of your compliance work each month and work on ways to improve it so that you bring these costs down.
The small business sector continues to struggle as it has done since the Global Financial Crisis affected Australian businesses in 2007 and 2008. According to the Australian Chamber of Commerce and Industry Small Business Survey December 2014, small business confidence continues to fall as it has for the past four quarters. Furthermore, the past two quarters have seen sales revenues fall and wages pressures continue to affect small business.
Keeping down costs and particularly those which you can’t pass onto your customers in the form of price increases, is a vital component of ongoing business success.
