A blurring of personal and business life is causing significant problems for the UK’s self-employed workforce, according to the first set of findings from the ‘Definitive Study of the Self-Employed’, commissioned by Intuit QuickBooks, the world’s leading online accounting software. Research among 5,010 self-employed workers in the UK found that on average they spend over two hours per week separating business and personal finances, the equivalent of 15 working days a year. One in five (19%) reported poor financial management of processes like expenses has nearly put them out of business.
The UK is seeing a significant upturn in workers leaving salaried jobs and becoming self-employed, with 4.6 million self-employed workers recorded in 2016. But with three quarters (75%) of the UK’s self-employed workforce using the same bank account for personal and business income, many are damaging their chances of success by wasting time untangling business expenses from day to day personal expenditure.
Dominic Allon, Vice President and Managing Director, Intuit Europe said: “When people make the decision to become self-employed, they often focus on their idea, how to monetise it and the prospect of growing it into something brilliant. The reality of managing the business’s finances can be an afterthought when compared with the complexities of getting a plan off the ground.
“Our research shows how damaging this approach can be. No self-employed worker can afford to spend significant time unpicking personal and business expenses when there are business critical activities to focus on – and get paid for. Financial management needs to be at the heart of any strategy, right from the start of any business endeavour, otherwise there is a real risk of failure.”
The research considered the major challenges faced by self-employed workers. It was found that not having a predictable income (58%) and the uncertainty of the future (44%) were the most frequently reported challenges. However, further concern around the work / life balance was identified, with nearly one in four (23%) saying setting boundaries to stop work becoming a 24/7 commitment was a challenge, and 14% cited managing and scheduling life effectively as a concern.
Allon continued: “We still see many self-employed manually tracking expenses on paper or spreadsheets, which is shocking when we know that adopting modern apps to manage their finances could save them 15 working days a year. That is why we create solutions like QuickBooks Self-Employed, which solve this very specific need of untangling business and personal finances, to help more businesses succeed.”
Intuit QuickBooks has researched a significant number of the self-employed across the UK to understand the individuals behind this rapidly-growing group, including what’s driving them, their working habits and what the future holds for this workforce. This is the first in a series of findings that will be released by the company.