B2B Payments

Rethinking The Roles Of Data, Accountants In SMB Finance

FinTech and automation technology have cast a shadow of anxiety on the accounting industry in recent years, as certified public accountants (CPAs) began to wonder whether their jobs would be replaced entirely by robots. Those concerns have eased somewhat, however, as FinTech firms assure accountants that technology can operate in harmony with human professionals — and as analysts urge the CPA community to take on a more strategic role with their clients.

This is particularly true in small- to medium-sized business (SMB) accounting, where technology providers have said that CPAs have an opportunity to have manual, monotonous tasks automated for those professionals so they can provide an elevated level of strategic guidance to their SMB clients. Unfortunately, according to Xendoo Founder and CEO Lil Roberts, small business accountants haven't quite stepped up to the plate.

"Accounting has been a problem for small businesses throughout time," Roberts told PYMNTS in a recent interview. "Why? Because there is a big disconnect between the accounting industry and the small business owner."

The Real-Time Demand

CPAs and their accounting firms often operate on the traditional nine-to-five schedule, closing at night and on weekends. Furthermore, accountants request monthly bank statements and other financial documents from their small business clients to analyze that information and provide feedback.

However, running a small business is often a 24/7 year-round job, often having questions on a Saturday morning or needing financial analysis in real time. A small business may receive a notice from the IRS, Roberts offered as an example, but its accountant could wait days to call back to provide support.

From her own personal experience as an entrepreneur, Roberts added that she has not seen the level of service from accountants that a small business owner often requires to stay afloat and succeed.

"The role of accountants and CPAs should be to empower the small business owner to understand their business better, and that's something I haven't seen in all my years of being in business," she said. "That's not to say all CPAs don't do that, but the vast majority of the industry doesn't see their role as one that is supposed to help the small business owner understand their business."

An Open Banking Opportunity

Small businesses are digitizing more quickly than their accountants, according to Roberts, leaving a significant opportunity for technology to fill the service gaps and demand for real-time insights that traditional accounting firms cannot always provide.

For a company like Xendoo, connecting into businesses' bank account and credit card transaction data is key to facilitating that speed of analysis. It's the latest example of how the Open Banking industry frameworks seen in Europe are gradually proliferating into new markets like the U.S. While Roberts said that data sharing is not quite yet at the level it should be on this side of the Atlantic, it offers technology providers a way to connect SMBs to even deeper insights about their companies.

For instance, data integration not only enables analytics technology to assess a business' expenses and cash flow, but — as more data is collected — puts platforms like Xendoo in a position to help SMBs benchmark their performance statistics against other industry peers.

Analyzing spend and B2B payments data will be paramount to this trend, enabling platforms to advise small businesses about whether they should work with one supplier over another. Conversely, these tools can provide insight to those vendors about which customers will more likely pay on time, based on revenue and historical payment data — and even how they're likely to pay those bills, whether card, ACH or otherwise.

The Open Banking opportunities are vast, and not only enable technology to provide more strategic services to SMBs than traditional accounting firms, but can do so on a real-time and on-demand basis.

"We're giving small business owners a way to be able to have access to the financial data they need, which is the oxygen to run their business[es]," Roberts said.

Just as important, she added, is for technology to be coupled with human experts, who can guide them through the deluge of numbers.

"What small businesses are craving [are] people [who] speak their language," she continued. "They don't want to talk about credits and debits. They want to talk about what they need to grow their business[es], how to save tax dollars, whether they are in line with the profitability of their industry. It's a pain point I've felt for years, and I still don't understand why it hasn't been possible — the technology is here."



The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.