What does admin really cost a small business? Take a 20-person team where each person loses 30 minutes a day to admin. At £25 an hour over 230 working days, that’s £57,500 a year, before any software costs.
Your own figure depends on your team, and you can work it out with one line of maths. Below you’ll find the formula, what to put into each part, a calculator for your own numbers, the costs the formula leaves out and how to measure your team’s admin time in a week.
How do you work out what admin costs your business?
Take the number of people who do admin and multiply it by the minutes each of them loses a day. Divide by 60 to turn minutes into hours, then multiply by your working days in a year and by what an hour of their time costs the business. The answer is what admin costs you a year, and as one line it looks like this:
people × minutes lost a day ÷ 60 × working days × hourly cost = yearly cost
The maths is simple. What matters is the numbers you put in, so here’s how to choose each one.
People: count everyone who does admin
Count everyone whose day includes admin, not just the office team. Engineers write up job sheets, managers pull together reports, site staff fill in timesheets and salespeople chase quotes. If you only count people with “admin” in their job title, your figure will come out too low.
Minutes lost: only the time a better system or AI would save
This isn’t all the admin your team does. Some of it is worth doing, such as checking a quote before it goes out or talking a customer through an order. So “minutes lost” means only the time spent re-typing, chasing, searching and reporting that a better system or AI would take away.
Think of copying an order from an email into a spreadsheet and then into the accounts, chasing a customer for a purchase order, hunting for the latest price list or pulling figures together for the Monday meeting. If you don’t know your number yet, make a careful guess for now, then swap in a real figure from the one-week tally further down.
Hourly cost: the full cost of an hour, not just the wage
Use what an hour of that person’s time costs the business, not just their hourly wage. That means their pay plus employer costs such as National Insurance and pension contributions. Your payroll records or your accountant can give you the full yearly cost of each person.
To turn that into an hourly figure, divide it by the hours they work in a year. For example, if someone’s pay, employer National Insurance and pension add up to about £43,000 a year, and they work 230 days of 7.5 hours, an hour of their time costs the business about £25. We use £25 an hour in the examples below, but it’s only an example. Use your own figure, or an average for the people you counted.
Working days: why 230
There are about 260 weekdays in a year: 52 weeks of five days. Under the government’s holiday entitlement rules, most people who work a five-day week must get at least 28 days’ paid holiday a year, and employers can count bank holidays as part of that. Take off holidays and bank holidays and you’re left with roughly 230 days when people are actually at work. If you give more holiday, your team works part time or you close for a fortnight over summer, change the number to match.
Now try the formula with your own numbers in the calculator below.
Try your own numbers
a year
20 people × 30 minutes a day × 230 days = 2,300 hours a year, at £25 an hour
What does admin really cost a small business each year?
Here’s the formula at work for four team sizes. Each example uses 30 minutes lost a day per person, £25 an hour and 230 working days.
| People who do admin | Hours lost a year | Yearly cost |
|---|---|---|
| 5 | 575 | £14,375 |
| 10 | 1,150 | £28,750 |
| 20 | 2,300 | £57,500 |
| 50 | 5,750 | £143,750 |
Thirty minutes a day doesn’t sound like much. But it adds up to 115 hours a year for each person, roughly three full working weeks, or £2,875 at £25 an hour. And every figure in the table comes before you’ve spent a penny on software.
What costs does the formula leave out?
The formula only counts time. Admin costs you in other ways too, and none of them appear in the table above.
- Errors and rework. When the same details are typed into three places, sooner or later one of them is wrong. Someone then has to spot it, put it right and sometimes redo the work or send a corrected invoice.
- Invoices raised late. If invoicing waits until someone has time to gather the job details, the money arrives later too. Slower cash leaves less room to pay suppliers, take on new work or plan ahead.
- Quotes not followed up. A quote that’s sent and never chased can quietly become a sale that goes elsewhere. When everyone is busy, follow-ups are easy to let slip.
- Good people stuck on low-value work. Your best estimator or manager is paid for their skill and judgement. Every hour they spend re-typing or chasing is an hour not spent on the work only they can do.
These costs are harder to put a number on, but they’re real. So treat the answer from the formula as the least admin is costing you, not the full bill.
How can you measure your team’s admin time in one week?
A guess will get you started, but real numbers are better, and one normal week is enough to get them. If you’d like an estimate in the meantime, the 14-question admin scorecard estimates what admin costs you a year.
Pick a week that isn’t unusually quiet or busy. Then follow these four steps.
- Ask everyone who does admin to keep a simple tally, on paper or in a shared spreadsheet.
- For each task, they note what it was, how long it took and how often it came up.
- Focus on re-typing, chasing, searching and building reports, rather than logging every email.
- At the end of the week, add up each person’s minutes and divide by five to get their minutes a day.
For example, one person’s tally might show:
- Copying orders from emails into the job system: 5 minutes, 30 times a week (150 minutes)
- Chasing unpaid invoices: 10 minutes, 8 times a week (80 minutes)
- Building the Monday report: 45 minutes, once a week (45 minutes)
That’s 275 minutes a week, or 55 minutes a day, from just three tasks. It’s nearly double the 30 minutes used in the examples above.
What to do with the result
- Put a pound figure on it. Enter the number of people who do admin and their average minutes a day into the calculator above.
- Rank the tasks. List them by total time a week and start with the biggest one or two. Fixing one task that takes an hour a day saves more than tidying five that take a few minutes each.
- Keep the tally. It’s your “before” figure, so when you change something you can measure the hours it actually saved.
Real numbers also make it easier to act. A two-site trade business we worked with went from no time tracking to every job hour measured, and at one of its sites untracked time fell from 25% to 4% in under a year. See how in our case study of a two-site trade business.
Where do the hours usually go?
The hours usually go to the same handful of jobs:
- Re-typing the same customer, order or job details into email, spreadsheets, the job system and the accounts.
- Chasing quotes and invoices by hand, or not chasing them at all.
- Building reports by copying figures out of several systems to see how the week went.
- Answering the same questions, such as “where’s this job up to?” and “has this been invoiced?”
- Tools that only half fit, with spreadsheets and workarounds filling the gaps.
- A team unsure where to start with AI, who’ve heard it could help but don’t know which jobs to try it on.
For practical ways to fix each one, read the admin jobs AI can take off your team. If chasing quotes or building reports is the big one for you, see automating quote follow-ups with AI or setting up a weekly numbers dashboard.
Where to start
The quickest way to put a number on your own admin is the free admin scorecard. Answer 14 quick questions and you’ll get an instant score for each area, an estimate of what admin costs you a year and the three areas to fix first.