As the upcoming federal election nears, Australian small businesses are faced with many uncertainties including skills shortages, banks tightening lending criteria, and high interest rates.
However, uncertainty presents opportunities to embrace technology.
What are the key challenges facing Aussie businesses?
According to Intuit QuickBooks’ research, inflation and higher interest rates are a top challenge for businesses. The recent economic environment has been a significant hurdle and maintaining profitability despite higher prices and interest rates (27%) rank as the biggest obstacles businesses have faced over the last 12 months.
One in 2 (50%) have had to carry the burden of higher costs of assets for their businesses, and nearly half of businesses have also been impacted with increased difficulty obtaining financing (49%) and lower returns on investments (48%).
The March Skills Shortage Quarterly (SSQ) report found in 2022-23 small businesses had a fill rate of 52%, significantly lower than the 65% fill rate for large businesses.
It’s never been more important for SMEs to lean on technology to better navigate change. With a shifting landscape demanding more support for clients each year, accountants capitalising on tech adoption have a competitive edge.
Almost all (97%) have felt the headwinds of inflation and interest rates — and point to a challenging economic environment that does not improve as the greatest threat to the industry’s future. But more than 7 out of 10 (77%) accountants agree technology can help them.
In fact, AI and advancements in cloud accounting was ranked the top of the list by 24% of accounts in having the greatest positive impacts on the profession in the past 5 years. 80% say tech skills are just as important as traditional accounting skills — to support their own business growth as well as their clients.
In recent times, many SMEs have faced challenges finding skilled workers, however, this presents an opportunity for technology. When looking at the accounting industry alone, more than 9 out of 10 agree technology could help them solve workforce shortages by attracting and retaining great workers. Eight in 10 (81%) respondents agree that if the workforce does not stop shrinking, accountants will need to rely on technology even more for business success.
By streamlining compliance tasks, technology is making it easier for accountants to dedicate more time to strategic business advisory services, increasing face-to-face time with clients and making their client interactions more meaningful. As a result, businesses are increasingly turning to accountants as trusted advisors, rather than just compliance specialists. Accountants are stepping up to the challenge and leveling up their work. More than 8 in 10 respondents expect tech to elevate the quality of their advisory services over the next 12 months — particularly business strategizing (95%), risk management (91%), and valuation services (91%).
With the aid of technology, it’s no surprise that strategic business advisory is taking up a significant share of accountants’ time. On average, respondents report dedicating nearly a third (30%) of their time to strategic advisory.
It’s more important than ever for businesses to take a leap and engage with technology. Working with tech advanced clients has been proven to boost efficiency, strategic guidance, and client communication. The benefits are considerable, including increased efficiency and accuracy of deliverables (59%), increased capacity to collect and analyse client data for better financial insights and strategic guidance (55%), and improvement of communication and collaboration with clients through technology tools (50%), among many more.
It’s also becoming increasingly necessary for businesses to engage with technology to maintain a competitive advantage, as more than half of respondents (56%) admit to weighing clients’ use of technology in assessing whether they’d be a good fit for their business – ahead of potential revenue/cost benefit (42%).
There is every reason to embrace AI and start learning how to engage with it, as soft skills continue to be in demand and valued by customers. In fact, 8 in 10 (82%) of respondents agree that prioritising human interaction and connection with clients and staff is just as much of a competitive advantage as technological capabilities. If you’re waiting for a sign to level up your business’s technology game, this is it.
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