How technology can boost your bottom line

Cloud accounting software firm Xero has surveyed over 1000 UK small business owners to learn more about how they use technology, and the effect it has on their profitability. Among the key findings were:

• 95% of entrepreneurs believe that software and technology are key to running a “happy” business.
• Only 45% of businesses feel that they have the right tools to achieve this.
• Over a third of SMEs believe their systems are inefficient.

But what can SMEs do with this knowledge, to help boost their bottom line?

The importance of happiness

It may sound trite, but a happy employee is always a more productive employee. When staff have the tools they need to do their work with maximum efficiency, job satisfaction and loyalty increases. Loyal employees are engaged with the business, share your corporate goals and are more likely to be retained. Your business then benefits from improved productivity, reduced recruitment costs, and long-term skills development.

Businesses with engaged employees (those who enjoy their work and who share their employer’s vision) report earning 250% more revenue than their competitors who have a less well-engaged workforce.

Although cashflow in start-ups and expanding businesses is tight, investing in software and technology that makes your employees happy will repay itself. Ensure you survey your staff to find out what improvements could benefit their work.

The importance of efficiency

Being able to do more with less is key to managing healthy business growth and ensuring you have sufficient cashflow. Technology should be applied to help streamline and automate common functions, thereby freeing you and your team to focus on higher priority tasks.

The Xero report also found that start-ups and small firms that try and keep costs low by not adopting technology are actually causing themselves problems in the long run. Xero suggest that new businesses could be losing up to £35,000 in their first year of trading just through financial inefficiencies. Scale this up to consider the 5 million UK SMEs, and you have a potential £175 billion in avoidable lost revenue across the whole economy.

It is also important to note that efficiencies are only available by investing in the right technology. Using up-to-date technology is far more efficient than older equivalents; for instance, Microsoft estimate that small businesses may be losing up to 1 work week every year because of old PCs.

Investing in a subscription to a modern accounting platform like Xero is extremely affordable, and brings new efficiencies which quickly result in overall saving for SMEs. These savings can be compounded by choosing other technologies that mirror business processes and enhance efficiency and output. Implemented correctly, technology can free up even more money for use in other strategic activities – 49% of businesses say that new technology like Cloud computing has been key to helping them grow.

To learn more about Xero Accounting and how it can be used to improve your business’ bottom line, contact the team at 3 Wise Bears today – we will be happy to talk you through the options.