RICHMOND, BC--(Marketwire - Feb 12, 2013) - Sage North America released today the findings from a recent financial literacy survey regarding small business owners' concerns with tax compliancy. The survey, which succeeded a 2011 study focusing on financial literacy, aimed to gauge the overall perceptions, knowledge and habits of small business owners with regard to financial management, resources and compliance.
The latest round of findings revealed that 34 per cent of respondents consider dealing with taxes as a significant area of weakness in their business management, followed by managing sales and marketing (19%) and managing the finances of the business (15%). While small business owners on the whole struggle with taxes, the more years of experience they have, the less they consider it a weakness. While 46 per cent of small business owners with less than five years of experience reported dealing with taxes to be a weakness, this number drops to 28 per cent for those who have more than 10 years of experience in running a business.
Concurrent to this, 38 per cent of small business owners also reported that income tax is the activity they are most concerned about complying with, which is an increase from 32 per cent from 2011.
"Federal and provincial tax regulations and codes are often updated each year, and it can be difficult for small business owners to stay current with the changes when their main focus is their day-to-day operations and making their business profitable," said Nancy Harris, senior vice president and general manager at Sage 50 Accounting-Canadian Edition. "As taxes continue to be an area of weakness for so many businesses, it's important for Canadian small business owners to get the appropriate guidance from an accounting or bookkeeping professional or use accounting software to help ensure they meet any compliance challenges they may face."
To stay on top of updated rules and regulations, 55 per cent of small business owners depend on professional services, such as accountants and lawyers, while 31 per cent use government websites or phone lines.
Other highlights of the Sage Canadian small business financial literacy survey include:
- More financially literate small business owners -- those who have identified the single cost that has the largest impact on their business -- are more likely to use accounting software to stay current on rules and regulations, while those with larger businesses are more likely to consult with professional service providers.
- When it comes to financial knowledge, respondents cited EI/CPP compliance (11%) and tax payments (10%) as the financial management areas they know the least about.
- Small business owners who have been running a company for more than 10 years are significantly more likely to believe they know what they need to know about tax payments and EI/CPP compliance than those who have five or less years of experience (40% vs. 16% and 30% vs. 14% respectively).
- Those small business owners who use accounting software are more comfortable dealing with taxes than those who do not.
The survey was conducted October 1-4, 2012, and its results have a margin of error of plus or minus 5%, 19 times out of 20.
Sage is a leading global supplier of business management software and services for small and midsized businesses. The Sage Group plc, formed in 1981, was floated on the London Stock Exchange in 1989 and now employs more than 13,500 people and supports more than 6 million customers worldwide. For more information about Sage in North America, please visit the company website at NA.Sage.com. Follow Sage North America on Facebook, Facebook.com/SageNorthAmerica, and Twitter, Twitter.com/SageNAmerica.
©2013 Sage Software Canada, Inc. All rights reserved. Sage, the Sage logos, and the Sage product and service names mentioned herein are registered trademarks or trademarks of Sage Software, Inc. or its affiliated entities. All other trademarks are the property of their respective owners.