Spanish small businesses spend an average of 65 minutes a day on administrative tasks related to their finances, which is roughly 28 working days per year. This is just one of the challenges identified in a study by Monzo, the digital bank. Delving into the day-to-day hurdles faced by Spanish entrepreneurs has highlighted the need for simpler, more efficient financial management.
The administrative burden not only takes time but also has a direct impact on the business. 47% of Spanish SMEs say the time spent on these tasks slows their growth, while 78% admit they often work late or on weekends to keep the administration up to date.
In this context, more than half of Spanish companies (51%) would be willing to switch financial institutions if they found a solution that bundles everything they need to manage their finances in one place. In fact, 44% say they would stay with their current bank, mainly because switching seems to be a process that takes too long.
Less Financial Management, More Time for the Business
Managing the business’s finances is one of the main sources of stress for small business owners. 40% acknowledge that it is their top concern, ahead of regulatory compliance (34%) and business growth (24%). And this pressure is only increasing: 47% say the time spent managing their finances has risen over the past 12 months. And for 68%, simplifying this management would allow them to reclaim time to focus on the activities that truly drive their business forward.
The cost of this complexity is also evident in the relationship SMEs have with their financial institutions. 55% say they have been charged unexpected or unjustified bank fees in the last 12 months, averaging about $140 per incident.
Thus, the data show that there is an opportunity to rethink the relationship that small businesses have with their finances. And that is exactly what Monzo intends to do. This translates into offering free bank accounts with no hidden fees, along with tools like Tax Pots, which automatically earmark a portion of each payment received for taxes and receipts, cash-flow analysis to track cash inflows and outflows, and the automatic export of transactions, receipts and statements. All of this together is designed to reduce the time and financial burden of running a business.
Francisco Sierra, CEO of Monzo Spain, states: “Entrepreneurs shouldn’t have to spend such a large portion of their time on administrative and financial issues. Our goal is to understand the real problems that businesses face day to day, and bring to Spain a banking experience that helps them solve them more simply, clearly, and intuitively.”
A Need Begins Even Before Starting a Business
Financial challenges arise long before a company officially begins operations. Monzo has found that 72% of Spanish entrepreneurs turned to an accountant or adviser to handle financial and administrative aspects during the startup phase. On the other hand, founders had to deal, on average, with nine different organizations to complete the initial steps.
For half of the entrepreneurs (50%), the administrative procedures related to the startup phase delayed the launch of their activity. 31% even considered abandoning the project before starting due to the complexity of the process.
74% conclude that having a clear guide on the administrative tasks and the regulations to follow would have made it easier to begin, and 73% indicate that it would also have helped them find a simpler way to open a business bank account. Monzo aims to eliminate the complexity of starting a business. Clients can apply for an account in minutes, with plain, straightforward language and no confusing jargon.
A New Way of Understanding Business Banking
The study’s results show a clear demand: small businesses want to spend less time managing their finances and more time growing their business. More than two-thirds (68%) believe that being able to manage their finances more easily would give them back time to focus on what matters most.
In response, Monzo is preparing to enter the Spanish market with a business banking experience designed to simplify everyday financial management with useful tools and services, all in one place. Customers will be able to apply for an account in minutes, with an easy onboarding process, integrated Bizum, and 24/7 customer support, every day.
