When David Cameron called out the positive contributions micro-businesses have made to the UK’s wealth and employment, he echoed what many already know – SME’s make a huge contribution to UK prosperity. Indeed, they are responsible for around 65% of business sector employment.
But making this huge contribution is hard work. Constant threats of new entrants and market changes mean that as well as being on top of the operational and marketing aspects of running a business, good financial management is paramount. SMEs need faster access to key financial information so they can make timely and accurate decisions.
The SME sector has long relied on the accounting profession to perform the traditional year-end and quarterly compliance services but, like many industries, digitisation and the internet are presenting new ways of making this relationship much more valuable.
For example, the delivery of digitised bank statement data provides accountants with daily information that can be used to help their clients manage their day to day business – taking a predictive view to assist the small business rather than simply looking at how they performed in the past.
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Better still, SMEs don’t need to spend hours at the computer as data entry is largely eliminated as transactions are automatically uploaded to accounting software systems and once there, can be automatically coded to the relevant income and expense categories.
This automation means accountants can take control of the entire accounting process relieving SMEs from the burden of having to become ‘part-time bookkeepers’. Instead, SMEs can spend their precious time focusing on the core activities of running their business, armed with timely analysis and advice that their accountant is now able to produce.
Take the example of a client of Bowyers Accountants in St Helens. The small business used to deliver large boxes of information long after the end of the financial year. The team at Bowyers then had to painstakingly enter this data into the accounting software system. Now, that data arrives every day from the SME’s bank via Bankstream, and is processed largely automatically meaning information is produced in close to real time, and with greatly reduced manual work.
As a result, Bowyers Accountants use the time saved to discuss more valuable issues with the client, in a timelier manner – and so can provide far more insight into their client’s future and decision making.
As accountancy technology continues to evolve, SMEs can expect to benefit from more choice in the type and level of support they can get from their accountant. Traditional year-end and compliance services remain key, but with software platforms in place to automate this work, SMEs can use the valuable information, knowledge and expertise provided by accountants to forecast a much brighter future.