When it comes to digital transformation, small and medium businesses (SMBs) are rarely the first thing that comes to mind. True, start-ups, which are typically small, are singled out as somehow different, usually on the basis of predicted growth potential, but other SMBs are often ignored.
While multinationals get most of the attention, small business, particularly sole traders, form part of the backbone of the economy, and yet, by their very nature, these businesses are those least prepared to deal with blizzards of paperwork and often too cost-sensitive for traditional accounting solutions.
Indeed, European Commission studies in 2008, 2011 and 2015 attempted to shine some light on how difficult accounting can be for these businesses. Notably, the 2015 study proposed lessening the accounting burden “because of the importance of small and medium-sized enterprises to the European economy”. In Ireland, small businesses are the heart of the economy, with Central Statistics Office (CSO) figures indicating the country is home to a quarter of a million of them, and an estimated 55,000 in the construction sector alone.
Native software company Big Red Cloud has supported the SMB sector for years, offering sophisticated and easy-to-use tools that dramatically lower the burden on businesses – and their accountants. International giants have been casting an eye over Ireland, too, with British-based Sage advertising heavily on radio, while US-based Intuit also has a presence.
There is more to this, however, than replacing the annual ritual of turning up at the door of an accountant, shame-faced and clutching folders filled with receipts. While a reduction in manual bookkeeping and keying-in of information is good for everyone, moving accounting to the cloud can do more than cut costs: it allows the smallest of businesses to think about more than this week’s work, getting to grips with future planning.
Important questions, not least “are we profitable?”, can be answered with a single glance at a graph, and a few clicks will reveal why or why not. The thorny issues of budgeting, expenses, tax and equipment purchases can all be modelled, and this can be done remotely via web site login either by owner-operators or staff, as well as linking directly into an accountant.
Changes in the economy, such as the much-ballyhooed growth of the so-called ‘gig economy’, mean this is more important than ever. Many former employees who strike out on their own, voluntarily or otherwise, soon find they are unprepared for the complexity of the unpaid task that awaits them.
Moreover, given the dangers of platform monopoly, particularly for businesses reliant on the likes of Amazon and Facebook as advertising and sales channels, anything that allows businesses to gain a competitive advantage by better understanding where their money comes from and where it goes is more than welcome.