Australian SMEs continue to feel the cumulative weight of red tape burdens, while dealing with big businesses remains a key impediment to success, recent NAB research has revealed.
In a survey of 808 small and medium businesses with annual turnover between $100,000 and $50 million, NAB found 44% of SMEs don’t fully understand the way the tax system that applies to their business, with 69% stating that dealing with red tape requires a lot of effort.
“Anyone who runs a small business understands only too well the pressure of complying with monthly BAS, annual income tax returns and a host of other paperwork,” Angela Mentis, NAB chief customer officer of business and private banking, commented.
“It’s no surprise to me that 69% of SMEs still cite dealing with red tape as taking a lot of effort.”
For many SMEs it is also a case of spending too much time working “in” instead of “on” their business (57%), while 48% of business owners feel overwhelmed with the complexity of running a business.
Along with red tape burdens, 49% of SMEs stated that dealing with bigger companies makes it tough for their business to succeed.
Despite these challenges, 71% of the SMEs surveyed believe Australia is a great place to have a business and 65% are confident Australia will remain a great place to operate a business.
Meanwhile, the inaugural Xero Small Business Insights report, developed with KPMG Enterprise and released this week, has provided further insight into the health and conditions of Australian small businesses, revealing that many business are operating in the red.
The report, based on anonymised and aggregated data from Xero’s 500,000 Australian subscribers, shows that just 50.7% of businesses had positive cashflow as of June this year, up from 48.9% year-on-year, with late payments having “crimped working capital ahead of the financial year-end”.
However, the report also shows that small businesses are starting to be paid sooner as large companies pledge to bring down payment times, with invoices with 30-day payment terms settled in an average of 36 days in June, down from almost 40 days the year before.