Study Shows Small Business Platforms Can Unlock Growth Through Embedded Accounting

Small business owners spend a significant amount of time every week on necessary and time-consuming tasks like accounting. Yet they can scarcely afford to take time and focus away from innovation and marketing in today’s hyper-competitive landscape. Hence, the market for digital tools has exploded.

Recently, Cornerstone Advisors surveyed small business owners across the U.S. The resulting report, New Revenue Opportunities From Embedded Accounting, provides valuable information on what small business owners truly want and need.

The good news for fintech providers is that the increased digitization of small businesses has created a greater need for digital platforms and vertical SaaS providers.

Tools that simplify and streamline business operations are high on the list of desires for small business leaders. According to Ron Shevlin, chief research officer at Cornerstone, 79% of the 750 small business owners and executives surveyed said they would be more likely to select an industry-specific software provider if it integrated all accounting functions into one application. These functions include bookkeeping, invoicing, expense management, financial reporting, and income tax services.

The Era of Spreadsheets is Waning

Even though the small business environment is increasingly becoming more digital, with extensive reliance on technology, most small business owners are still using spreadsheets rather than software to manage their business accounting — and they’re spending a lot of time doing it.

However, growing a small business requires the owner to step away from tasks that are too time-consuming and tedious. Good accounting software tools can streamline processes and are a must-have, not a nice-to-have.

According to the research, pain points business owners specified that were related to accounting functions included nearly 6 in 10 saying that their accounting functions are manual and labor intensive. Between 30% and 40% said they’re untimely, roughly a quarter say they’re inaccurate, and about 1 in 5 say their accounting functions are not well integrated with other financial functions.

Every platform that serves small businesses must listen to what these customers are saying and include accounting tools they value. As the study shows, prospective customers are much more likely to select a software platform as a provider if it integrates all accounting functions.

Differentiators are Key to Success

Holistic fintech, which considers every aspect of a business owner’s needs, is a true differentiator. That might surprise some, but I knew it would be significant — and the research shows a much higher desire than even I expected.

The platform customers that have been coming to us for Hurdlr’s Embedded Accounting solution say their clients are asking them for these services: bookkeeping, invoicing, expense management, financial reporting, and income tax services. APIs play a critical role today in building out customer-centric functions quickly and without huge expense, and Hurdlr’s API-first approach delivers.

According to Bain Capital Ventures, startups today build their software on a foundation of capabilities that were not readily available to the first wave of vertical SaaS providers, such as automated marketing, generative AI, and APIs. “Specialized software can more closely resemble a ‘one-stop-shop’ than ever before, streamlining the end-user experience and building loyalty.”

I advise small business-focused platforms to put everything their customers want on the roadmap. That is what customers value, and it’s what will help grow their revenue. The Cornerstone Advisors’ study clearly shows the value of embedding accounting functions within industry-specific vertical platforms. Start by downloading the report for free (no registration required), and then to simplify delivering what customers want, reach out to me about the white-labeled Hurdlr Embedded Accounting solution.