Accounting Pixabay / tax-468440_1280Dext has provided some insights into the pressures accounting tasks impose on SMEs. Despite firms needing to complete these tasks, 49% are still not using technology to help themselves. 51% of a survey sample of 250 small business leaders, are unaware of how to start that automation.

Business leaders are also not looking to their accountants for help. With 64.8% of business leaders completing the financial tasks themselves. Only 13.2% outsource to an accountant, and 22% use a combination of themselves and their accountant.

What perhaps isn’t clear from the survey questions is whether these firms use accountant software such as Xero, Sage or QuickBooks to manage the accounting data. Enterprise Times asked Paul Lodder, VP of Accounting Product Strategy at Dext. What was meant by “automate bookkeeping processes”?

He replied, “Automate bookkeeping processes refers to the use of technology to streamline and perform various accounting and financial tasks with reduced human intervention. This involves replacing manual and repetitive tasks with automated systems to improve accuracy, efficiency and overall productivity in managing financial records and transactions.

“The benefits of automating bookkeeping processes include reduced errors, increased efficiency, time savings, improved accuracy, better compliance with financial regulations, and the ability to focus on higher-value tasks such as financial analysis and strategic decision-making, empowering everyone to make the right decisions at the right time.”

Why this matters

Some business leaders are hindered in running their businesses without automated accounting processes. At a high level, Dext highlighted some businesses’ concerns in the current economic climate. Excluding SMEs with less than 10 employees, recent ONS statistics revealed that 20% are concerned with energy prices, 17.7% are concerned with inflation impacting the costs of goods and services, and 13.4% are concerned with falling demand. 67% reported some form of concern for their business in June 2023, though this is the lowest since March 2022.

With changing prices, visibility is key, and 32.8% of respondents do not have monthly visibility of their business expenses. There is a secondary impact to this beyond the business health. That is the mental health of business leaders. While the biggest strain is felt at year-end (49%), business leaders are also feeling the burden at quarter-end (26%) and at month-end (26%).

The problem is that these period end times take too long. 40% of SME business leaders feel they spend too much time on manual accounting processes. While there are solutions, 53% have not considered automating their bookkeeping tasks.

Sabby Gill, CEO of Dext
Sabby Gill, CEO of Dext

Sabby Gill, CEO of Dext, commented, “The results of our survey paint a vivid picture of the struggles small businesses are facing right now. There is a clear lack of understanding around the benefits of automated tech and how to access it at all, while many feel like they are spending too much time on manual tasks. With advancements in AI and machine learning continuing to emerge, there is light at the end of the tunnel. Stress levels, like the ones found in the survey, can be reduced and time can be saved through automation, giving users the opportunity to focus on what really matters; growing their small business.”

Solving the challenge

While some businesses undoubtedly use software or Excel to help them with the bookkeeping processes, they are still manual. Dext provides solutions that streamline tasks that can be both simple and complex and achieve a 99% accuracy rate, sometimes higher than manually processing financial transactions.

I asked Lodder how Dext can help small businesses. He gave four examples:

“Data Entry: Instead of manually entering data like dates, supplier names, and amounts from invoices, receipts, and bank statements into accounting software, Dext automatically does it for you. It’s like having a helper that puts all the right information in the right place. Dext is smart enough to follow rules so that everything is recorded correctly.

“Gathering Information: Dext gives you a number of different options to collect your paperwork for processing. For example, with Dext Commerce, we can gather all the important data from the places you sell things online, like Amazon or eBay. Then, we organise everything nicely, making sure your records are complete and accurate.

“Sorting Transactions: Dext can figure out where transactions should go in your records. It’s like a sorting wizard that knows which category each transaction belongs to. This saves you from having to manually categorize transactions and ensure a consistent approach is always followed.

“Matching and Checking: Dext can also help you make sure that the transactions in your bank statements match the paperwork you have. Dext checks if something is missing or doesn’t quite match up and tells you about it. It’s like a detective that helps you find any missing pieces.”

Enterprise Times: What does this mean

The purpose of this research was to focus attention on what and how Dext can help small businesses automate processes. In some ways, the line of questions and lack of qualitative element limits the usefulness of the data. Understanding how SMEs conduct their accounting processes would have been more useful. Are they using software, Excel or a bookkeeping solution? What other technology are they using? This might have also provided some useful information for Dext about their target market.

The research also fails to highlight the administrative challenges that SMEs face and the volume of invoices they process, both on the sales and purchase sides. Are expenses an issue? Dext has several solutions that can help automate accounting challenges, but which challenges faced by business sectors are unclear.

Dext Solutions have saved 35 million hours of manual data entry and has scanned 1.44 billion receipts & invoices. For business leaders that are spending what they feel is too much time manually processing documents, perhaps Dext can provide the answer to automation and looking at their website might be the first step to automating their accounting processes.

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