Adam Clarke - Nov 24, 2017

How can small businesses solve their productivity issues?

Now that the dust has settled on the latest UK budget, I decided to take a look and see what impact it will have on small businesses. 

Whilst it won’t go down in the history books, there was one key area that I wanted to explore further, company productivity, or the lack thereof.

Whether you call it the Autumn budget or not, it was actually just the budget; the date has been moved to Autumn every year, so in 2017 we had two budgets instead of one. Emily Coltman from Free Agent believes that this was the single biggest change, and I am inclined to agree.

So it wasn't as dramatic as some might have hoped, but the fact that nothing much changed is quite important, especially for small businesses. A lack of obvious curve balls to 2018 plans, was likely to be welcomed news.

So what did happen in the budget?

If you’re close to the VAT registration threshold, you might have been sad to hear that it has been frozen for two more years from April 2018. Or you might be pleased that you’re likely to hit this milestone in your growth quicker than you expected. Either way, it’s a good idea to get into good VAT habits ahead of 2018, especially if your growth plans take you over the threshold.

Speaking of good habits and nothing changing... The bold plan of ‘Making Tax Digital’ is still a bold plan, but as of right now it’s still on course to become compulsory as of April 2019. On a lighter note, whenever I hear “Making Tax Digital” (MTD), all I can think about is “Make America Great Again”. I have no idea why and if it’s just me, feel free to drop a comment.

If you’re planning to buy a new diesel van after April 2018, then you’ll be pleased to know that the new diesel tax will now only affect cars that don’t meet the clean diesel criteria. These will be subject to increased tax. 

Welcome or not, we should all be trying to do our bit to buy cleaner diesel vehicles. Not only because they are cleaner, but also because these will likely use less fuel and be cheaper to run.

So while there was little in the budget to write home about, some of the wider economic updates didn’t make for great reading.

Productivity is still a thorn in the side of the UK economy

As Paul Krugman, the Nobel Prize-winning economist said in 1994,

“Productivity isn’t everything, but in the long run it is almost everything,”

The FT’s recently published “Four theories to explain the UK’s productivity woes” just before the budget. As someone who works at a leading Fintech, their first theory rang truest to me. “Companies have invested too little” and our research into the expenses economy goes some way into backing up that train of thought.

It’s fair, (and perhaps not surprising) to say that companies which actively strives to increase their productivity in 2018, (in meaningful ways) can expect to be in a better position to take advantage of the opportunities that are out there.

It’s also fair to say that investing in new technology doesn’t necessarily mean a massive capital outlay.  That said, many Digital Transformation initiatives often run into problems because they try and use digital solutions without changing their processes or investing in retraining.


Simply investing in a tool and expecting it to simply bend to your company’s processes, is to be blunt a false economy.

The Expend Difference - Xero

Reading the recent ‘State of Small Business’ report by Sage and Nesta. They dedicated 10% of the report (5 pages) solely to productivity, and although 73% of new jobs have been created by small businesses since the recession, the lack of an increase in productivity continues to be a pressing issue.

So whilst Expend’s mission is to “Simplify Company Spending”, many of our recent small business customers have come to us because they see us a tool to improve their productivity and reduce the admin burden.

In truth, Expend only currently tackles one piece of the productivity jigsaw, but tackles arguably the most frustrating piece for both employers and employees.

Download a copy of our Expenses Economy Report today.

Paul Krugman also said:

“A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.”

Just by saving as little as an hour a week, per employee, on company spending and expenses can add up to thousands of pounds in productivity savings over a course of a year, and that’s even before you take into account back office resources and accountancy fees.

Not to mention the increased time employees have to focus on their actual job. More time = more sales, more face time with customers, etc etc. You get the picture, but to achieve this saving, companies need to be willing to change their processes to a better way of working.

Not surprisingly, Expend can help companies do just that. If you’re ready, you can sign-up today and get prepared for a more productive 2018. If you’re on the fence, get in touch and we’ll show you what it can do for you and your business.


Guest post by Adam Clarke, Expend’s Marketing and Partnership Manager

Written by Adam Clarke

I'm the Marketing and Partnership Manager at Expend. When I'm not fighting expenses admin with our amazing solution, you can find me eating my way around London's food scene.