B2B Payments

The Financial Technologies SMEs Aren’t Using

Shutterstock

The average small business considers itself a “moderate” user of technology, according to the PYMNTS.com SMB Technology Adoption Index. Only 13 percent say they’re willing to jump on the innovation bandwagon. Clearly, there’s still a long way for SMEs to go before they fully embrace FinTech – and the latest research on the topic reinforces the notion that small businesses aren’t using technology the way some may have hoped.

70 percent of SMEs didn’t use tax software in 2016, found Office Depot in its most recent Small Business Index survey. Nearly a quarter of small businesses said they still use paper forms when filling out taxes. According to Office Depot senior director of contract marketing, Christine Nessen, “SMBs should strongly consider transitioning to tax software.”

There are so many options available to small businesses today, the executive added. That call for tax software adoption could be heard: According to the report, 21 percent of small businesses that are planning on changing their tax filing behavior this year also said they are looking into using more technology and reducing their dependence on paper. Office Depot warned SMEs not to wait until the last minute to file their taxes, despite a tenth of small businesses reporting that they wait until Tax Day to file theirs — or they ask for an extension, according to researchers.

37 percent of SMEs in the U.K. sought external financing in 2016, suggesting these firms simply aren’t interested in lending technologies or accessing, for instance, a loan from an alternative finance provider. Just 5 percent said they applied for an overdraft facility from their banks or renewed a loan. The statistics were published last week from BDRC Continental, which surveyed 100,000 U.K. small businesses. And while these companies aren’t using alternative lending technologies to finance operations, BDRC researchers said that doesn’t suggest a lack of confidence: 70 percent of SMEs said neither political nor economic uncertainty posted a barrier to growth in the last quarter of 2016, and 69 percent said they remain optimistic about their chances to acquire a bank loan should they decide to pursue one. Still, for SMEs that trade internationally, researchers found a bit more concern about the global economic and political climate.

24 percent of SMEs don’t use social media for their businesses, found the latest analysis from B2B ratings and reviews company Clutch. Small businesses in 2017 may not be using marketing technologies to their full potential; according to the CEO of creating marketing agency Project Bionic, Joshua Dirks, small businesses are “missing out” because they don’t take advantage of technologies like social media. Another social media expert, Sociallyin founder and CEO Keith Kakadia, said that social media empowers small businesses with access to data on the performance and impact of a marketing campaign. For those small businesses that do use social media, Clutch found that Facebook is by far the most popular platform, with more than 90 percent of social media-engaged SMEs using the tool. More than half use Twitter, too.

18 percent of small businesses don’t use accounting software, said Viewpost, reporting findings from its “Success Through Accounting Study” released last week. Only about a fifth of SMEs in the U.S. surveyed said their accounting software is integrated with an invoicing and payments solution. A quarter of SMEs said they plan to complete that integration by the end of the year, but even more — 27 percent — said they don’t have plans to pursue that integration at all. Viewpost CEO Max Eliscu said these figures aren’t surprising, though, but still called the data “staggering.”

“Small businesses continue to be highly dependent on spreadsheets, manual data entry and the postal service,” he said. “They lack both connectivity to their trading partners as well as automation to help reconcile and understanding their cash flow.”

Click to comment

TRENDING RIGHT NOW

To Top