Paperwork and Record-Keeping
• The individual(s) completing and maintaining paperwork and records in a small business is dependent on the subject matter of the paperwork and the size of the firm. Owners most frequently handle paperwork and record-keeping related to licenses and permits (55% of firms), purchases (46%), and clients/customers (46%). They least frequently deal with financial (27%) and tax (12%) records. Three of four have someone (another firm) outside handle their tax paperwork. Paid employees customarily do most of the paperwork and record-keeping in about 25 - 30 percent of firms. Employees are much more likely to do so in larger, small businesses than in the smallest ones regardless of subject matter (except tax). Unpaid family members do the paperwork in less than 10 percent of cases.
• The cost of paperwork also varies by subject matter and firm size. The more paperwork and record-keeping that must be sent outside, the more expensive paperwork and record-keeping becomes. Owners of larger, small firms pay higher average prices per hour because they are more likely to send their paperwork to outside professionals and because the value of their time on average is higher.
• The estimated average per hour cost of paperwork and record-keeping for small businesses is $48.72. By subject matter the average per hour cost is: $74.24 for tax-related, $62.16 for financial, $47.96 for licenses and permits, $43.50 for government information requests, $42.95 for customers/clients, $40.75 for personnel, $39.27 for purchases, and $36.20 for maintenance (buildings, machines, or vehicles).
• The typical small business employs a blend of electronic and paper record-keeping. Less than 10 percent use paper exclusively and a handful use only electronic means. The type of record most frequently completed and maintained on paper is licenses and permits.
• Increased computerization helps small-business owners cope with their paperwork and record-keeping responsibilities. Ninety-two (92) percent of small-business owners use one or more computers in their business. Fifty-eight (58) percent of users employ the Internet regularly for business purposes, and 57 percent of regular users have a high-speed connection.
• About half hold all types of records seven years or more, but two-thirds to three-quarters hold financial and tax records that long.
• Applicable records are typically destroyed in a manner that protects the privacy of individuals. However, between 15 to 20 percent of owners trash paper records (in contrast to shredding or burning them) and about one in four simply delete electronic records. Owners treat personally sensitive records in virtually the same manner that they treat those sensitive to others.
• No single difficulty creates the government paperwork problem. The most frequently cited problem is unclear and/or confusing instructions (29%). The second most frequently cited difficulty is the volume of paperwork (24%). Duplicate information requests (11%) place third, followed by maintenance of records that ordinarily would not be kept (10%) and requests for inaccessible or non-existent information (9%). Twenty (20) percent could not decide.