Many small and medium-sized businesses (SMBs) in the UK are spending too much time and money on their financial administration, new research has found.

The study by software provider Myob found that a third of UK business-owners are still compiling all their financial accounts on time-consuming Excel spreadsheets, while a further 19 per cent are even using paper-based ledgers to record their business costs.

Overall, the firm estimated that inefficient financial administration techniques cost UK SMBs £4.8 billion each year, with business decision-makers spending an average of 26 days per year on their accounts - compared to just 14 days a year that they take in annual leave.

"The financial burden… is reaching a tipping point and is affecting the profitability and performance of many businesses up and down the country," commented Wayne Schmidt, general manager of Myob.

"With compliance and tax issues growing in volume and complexity year on year, small businesses must implement more rigorous financial management systems and techniques to release the valuable time they spend on admin tasks and invest it in more profitable activities.

"Many [SMBs] are still in the dark when it comes to implementing technology that helps them to focus less on admin and accounts and more on developing their business."

In a recent survey of SMEs for Connect, the two most important benefits of outsourcing were 'guaranteed response times' and 'allowing in-house IT staff to concentrate on more strategic issues'