Nick Williams, above, UK Product Director at Intuit QuickBooks, explains why SMBs are increasingly turning to experts for guidance on business, financial and hiring plans amid economic troubles, and how increased business adaptability and resilience may be the key to surviving a recession.
Over the past two years the economy has performed erratically and now the UK faces a looming recession. This instability requires rapid, real-time response in businesses in order to stay afloat. Improved technological abilities are able to lead to improved financial management for businesses, and the need for businesses to be prepared and resilient is paramount for the year to come.
Small businesses play an essential role in sustaining the UK economy, yet many are at risk of failing if they do not have the necessary support structures in place to make it through the looming recession.
A new study from Intuit QuickBooks found that nearly 9 in 10 (89%) of accountants report using tech over the past two years to help meet the constantly evolving needs of SMBs. In the face of this increase, in the next year alone 95% of accountants plan to invest in technology.
Of those surveyed, 83% of accountants believe companies that get real-time financial insights are more likely to survive a recession. Incorporating advanced technological solutions that offer these real time insights could prove to be a defining decision for SMBs succeeding over the coming years.
SMBs are feeling the impact of economic uncertainty
With 5.47 million small businesses making up more than 90% of the UK’s business population, it is vital that we look at ways to support small businesses; not just through financial investment but also through long-term advances that will future-proof these crucial community organisations. The strength of a business often lies in its ability to react and adapt to unexpected challenges, and embedding advanced technological solutions and financial management software into the day-to-day running of the business is the best way to achieve stability.
The lack of consistency and predictability in the business world is leading to higher demand for expert insights and advice, due to plans needing to be continually updated and amended.
The pressure of adapting to unforeseen global issues that have hit the UK economy over the past few years means the core challenges for small businesses shift constantly. QuickBooks’s survey of accountants found that over the past two years 64% of their small business clients required more support with financial management; 57% needed more support with financial forecasting; 50% of businesses have needed more support with hiring plans/strategy; and 59% needed help with business plans/strategy.
As consumer spending behaviours shift during times of economic struggle and recession, SMBs must adapt their business models to reflect the changes. By incorporating technology that is able to provide real-time insights into the running of the business, SMBs are equipping themselves with the crucial ability to stay informed as to how the economic changes are impacting their business.
41% of accountants say that their SMB clients are more trusting of the advice they provide when they use real-time financial insights. These real-time insights enable accountants to improve their own understanding of small business clients, which 48% say allows them to provide better advice to small businesses. This can prove to be a critical advantage for SMBs, as well-informed guidance can lead to savings of up to £28,000 a year.
Building business resilience
With 87% of accountants using tech in the past two years to help meet the evolving needs of SMB clients, technology is recognised as a vital resource for businesses in increasing adaptability in challenging circumstances. Advancements in tech enable small businesses to improve functions across all operational areas – from financial management to hiring/employee management, payroll systems, customer experiences, and more.
It is also emerging as a useful tool in facilitating personal, human support. When using tech, 75% of accountants report having more free time for face-to-face meetings, with just as many (76%) noting the time spent with clients is more meaningful. Having more time to consult with expert advisors, such as accountants, can provide much needed support to SMBs when facing challenging times.
While the economy remains an unpredictable force that businesses must manage, it is clear that there are steps these businesses can take to enhance their adaptability and therefore resilience in the face of unexpected challenges. Though a possible recession will worry many, the industry-wide commitment to technological advancement and improved business support is certainly a cause for optimism.