Accounting Software Key to Small Business Survival & Growth—Major U.S. Lobby Group

Credit: Kampus Production

Small businesses often don’t have the same IT budgets as large companies. That’s why it becomes even more important for them to assess which software products are truly essential. With this in mind, solo entrepreneurs and SMEs are asking: Does a small business need accounting software? Turns out that they do.

Based on a recent report from the United States Chamber of Commerce, small businesses don’t only choose to adopt digital solutions for accounting but also rely on accounting software for their survival and growth. The report found that 56% of small businesses now use accounting software, which makes it the second most-used app by small businesses, second only to social media apps (66%).

Moreover, the report showed that 51% of small businesses are likely to use technology for back-office processes. These include accounting and payroll. A digital solution like accounting software for small business helps SMEs handle a lot of financial and administrative tasks that would otherwise require additional resources, time, and employees.

Leveraging Accounting Software to Survive and Thrive

There are 32.5 million small businesses in the US, which make up 99.9% of all businesses in the country. As big as their numbers are, they are also the most vulnerable to economic challenges. And there have been a lot over recent years,  from talent acquisition to the COVID-19 pandemic, rising inflation, and supply chain disruptions.

But technology helped small businesses survive and even grow through these challenges. If there’s a silver lining to the COVID-19 pandemic, it’s probably the quick adoption of digital solutions for business continuity. Technology allowed businesses to connect to customers, deliver orders to buyers, and complete administrative tasks even during the period of strict lockdowns. Technology solutions like accounting and payroll software play such an important role in a small business tech stack that 77% of respondents in the report said that they will struggle to survive without their technology platforms. As the report stated: “Since 2020 small businesses that incorporate technology platforms are more likely to see growth in their sales, profits, and employment.”

Payroll Management

Small businesses that don’t have the capacity to hire a full finance team can rely on the core features of accounting software. One of the key use cases of accounting software is payroll preparation. Small businesses and solopreneurs often wear many hats when running their businesses, and that include data entry and management. But you wouldn’t want to spend too much precious working hours on these types of back-office processes.

With payroll features, small businesses can automate and streamline data entry. This reduces the processing time of their payroll, which leads to more time spent on high-value tasks. Also, since payroll systems can calculate overtime and auto-process salaries, users can eliminate human errors caused by manual entries.

Data Security

Data security is another area where small businesses can benefit from using accounting software. Contrary to what people think, large companies are not the only targets of cyber criminals. Cybercrime statistics reveal that small businesses lose an average of $200,000 per ransomware incident, which pushes many to go out of business.

Small businesses collect and manage sensitive data like employee and customer information, and supplier details. They also possess financial information like bank accounts and credit card details. Since nearly all accounting software vendors today provide cloud-based deployment and use cutting-edge security protocols, users have layers of security while working on their data.

Integrations with Other Business Apps

Moreover, accounting software vendors offer custom APIs and integrations with popular business applications. With these integrations, small businesses can connect their accounting software to their POS systems and payment processors. This means bank transactions can be added automatically and reflected in real time. As a result, businesses that use accounting software can not only improve the security and accuracy of their data. They can also simplify finance and tax processes.