UK SMEs not paid for a third of what they do

20 March 2014

UK SMEs not paid for a third of what they doUK freelancers and small businesses are not getting paid for a third of the time that they actually spend working, according to FreeAgent.

The research shows that for every working hour that an average freelancer or small business owner bills their clients for, they will actually spend an additional 30 minutes doing work that they won't charge for.

FreeAgent analysed information from more than 30,000 of its small business customers and found that – when users recorded the time they spent on work-related projects – for every 90-minute period, only an hour of "billable" time is actually invoiced to clients.

Ed Molyneux, CEO and co-founder of FreeAgent, said: "We know that people who run small businesses work incredibly hard to make their ventures a success. But it's still surprising to see how much of that hard work they effectively do for free."

He added: "Of course this isn't necessarily time that's being wasted – as many small businesses will either invest some of their own personal time into the projects they work on, or carry out important admin they haven't agreed to bill their clients for – but it may mean that they aren't working as profitably as they could be."

Meanwhile, new research from Barclays Business Banking has revealed that the income of UK small businesses at the end of 2013 was at its highest since before the start of the 2008-09 recession. Its data also showed that the annual growth rate of SMEs in Q4 2013 was the strongest since before the turn of the century, up 17% from Q1 2000.

Sue Hayes, managing director for Barclays Business Banking, said: "Along with recent GDP data, this indicates the UK economy is starting to put its more difficult years behind it, painting a promising picture for 2014 with confidence returning to the small business market. UK SMEs are slowly but surely stepping out of the post-recession struggle."

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