Old-fashioned bookkeeping costing small businesses up to $10,000 at tax time

Originally published in Inside Small Business, July 13, 2021

New research reveals the high cost of losing paper receipts for Australian small businesses, especially during tax time. According to a report by Australian FinTech Slyp, put together in collaboration with NAB, one in four businesses lose up to $10,000 by simply misplacing receipts, and a further eight per cent say that their losses for doing so amount to between $10,000 and $100,000.

The report also notes that 62 per cent of small businesses lose paper receipts at tax time, falling back on manual bank transaction comparison, diary checking and even simple memory recall to identify lost receipts. And for 47 per cent of SME owners, these lost receipts lead to stress and anxiety at tax time.

Furthermore, only 49 per cent of small businesses have a filing system in place to collect receipts throughout the year and nine per cent still rely on an old-fashioned shoebox system. Business owners also admitted that gathering old receipts is the most time-consuming part of the tax process (42 per cent), followed by fact-checking (39 per cent).

“The tax time process is time-consuming for small businesses and it’s clear that there’s a disconnect between the current manual process and the tools that small businesses are using,” Paul Weingarth, CEO and Co-Founder of Slyp, said. “Three quarters (75 per cent) of Australian small businesses say they’d like to change the way that they process paper receipts in the next financial year and more than two-thirds (69.6 per cent) say they’d be more inclined to purchase through a retailer that provided digital receipts.

“We’re working with merchants and banks across the country to drive the switch from paper receipts and to ensure that more small businesses are delivered digital, smart receipts straight into their banking app,” Weingarth added. “We are on a mission to help small businesses process their tax-time financials faster and can get back to their key priority – growing their business.”

Tania Motton, NAB Executive for Business Banking, highlighted how hard-working Australian small-business owners are, and the fact that 81.1 per cent of them say that the availability of digital receipts would improve their tax-time process.

The Slyp/NAB Tax Time Report was developed and hosted by CoreData, surveying 307 Australian small businesses.

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