Fintech accounting platforms are helping enterprises digitize accounting, bookkeeping and tax filing to increase the speed and accuracy of these processes. They allow anytime, anywhere access to financial information and provide data-driven insights that can help businesses grow. Small business owners, like most of us, are increasingly going digital. Some began their digital transformation with ecommerce, turning to platforms like Amazon and Shopify to change how they sell products and services. The success of small businesses on these platforms has helped fuel the digitization of many other aspects of their operations, including accounting.
Ecommerce platforms like Amazon and Shopify that offer turnkey services and tools are helping millions of small businesses go digital to reach customers. Numbers tell the story of this widespread shift toward ecommerce. According to an Amazon Small Business Impact Report, millions of small and medium-sized businesses sell on Amazon and half of all items purchased on Amazon come from these businesses. Shopify surpassed one million merchants on its platform in 2019 and reported total revenue of $1.073 billion in 2018.
Small businesses are not stopping their digital transformations with these ecommerce initiatives. They are continuing to invest in technology to improve processes and increase efficiency. A Spiceworks 2020 State of IT Report found that 37% of companies with 1-99 employees plan to increase their IT budget in 2020. Companies are increasing IT spend and embracing technology to help achieve their business objectives. A report by CompTIA found that 56% of firms with fewer than 20 employees cited technology as a primary factor in reaching businesses objectives.
Where are small businesses allocating this IT budget? Many are investing in cloud-based fintech accounting platforms that can help them achieve their business objectives.
Automation
Small businesses are turning to technology to automate accounting, bookkeeping and tax filing functions. These tasks can be a source of frustration for many businesses and mistakes often have serious repercussions on business longevity. Fintech solutions are helping enterprises automate these repetitive processes, speeding them up while delivering improved accuracy and efficiency.
Automated accounting platforms can be a game changer when it comes to productivity, providing up to five times the productivity level of a traditional bookkeeper or CPA. With these solutions, financial reporting is also automated. Weekly bookkeeping and financial reports can digitally reconcile companies’ expenses to increase financial visibility and help maintain financial health.
Cloud Technology
Cloud-based accounting platforms allow small businesses anytime, anywhere access to financial data and information. In the era of the mobile workforce, which is expected to reach 1.87 billion workers by 2022, this mobile access to data is a business imperative today for organizations large and small.
Cloud technology is often perceived by small businesses as solutions designed only for large enterprises. The fact is, this technology is becoming a fixture in a majority of business operations today to drive operational improvements. Data from Multisoft found that 80% of startups and SMBs surveyed report operation improvements within the first few months of adopting cloud technology.
Cloud based bookkeeping and accounting subscription services are actually an affordable way for small business to improve operations by saving on infrastructure costs, gaining flexibility to scale up or down with business conditions and eliminating the need to keep up with the latest versions of software.
Data-Driven Insights
Digital transformation of organizations is producing a lot of data. Consider that in 2010 there was only 2 zetabytes of data created, and by 2025, that number is projected to climb to 163. Whether the data is purposed for deeper analytics, benchmarking, consumer behavior tracking, or targeted advertising, data is key to powering smarter business decisions.
Fintech technology is providing small businesses with the data and analytics they need to remain competitive in the digital economy. For example, cloud-based accounting platforms can connect into bank account and credit card transactions to track expenses and cashflow, providing a clear picture of financial performance to better inform business strategy. This data can also help small businesses track key performance indicators and benchmark their performance against competitors.
The small business landscape is changing with digital transformation taking center stage to help small businesses succeed. A Deloitte study has found that 85% of U.S. small businesses report that digital tools are critical to their success. The study also found that digital tools enhance revenue performance with more than 70% of SMBs attributing some of their revenue growth to the use of digital tools.
Fintech solutions are a key part of this digital transformation. An article by Kate Patrick on BankingDive captured the importance of fintechs to this transformation saying, “the implication and impact of SMB-focused fintechs is potentially huge: besides simplifying basic accounting tasks, these fintechs equip SMBs with the opportunity to grow on a global scale while ensuring efficiency and ease of access. If accounting and bookkeeping tasks are automated, SMBs can spend more time innovating and growing their business.”
