Small firms and freelancers ‘spend a third of their working lives unpaid’

Report claims that firms only charge an hour’s time for 90 minutes of work

Small firms and sole traders in the UK are undercharging for the work they do, according to a report which claims businesses in the UK are spending as much as a third of their working lives unpaid.

A poll of 30,000 small businesses conducted by accounting system provider FreeAgent found that for every hour of work small firms charged their clients for, they would spend an average of 30 minutes doing work that they would not charge for.

The study was carried out by respondents closely recording the actual time they spent working on projects compared to the “billable” hours they charged clients for, and found that for every 90-minute chunk of time spent working, just one hour would be charged on the invoice.

FreeAgent said that the time that was unaccounted for did not necessarily equate to wasted time, as many small firm owners and sole traders could be using this time to carry out important business administration – but warned that the poll results showed that many businesses were not as profitable as they could be.

Ed Molyneux, co-founder and chief executive 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.

“That’s why it can be very valuable for small business owners to track their time, so they can see how long they spend working and – more importantly – which parts they actually get paid to do.”

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