Just like their larger competitors, small and mid-sized businesses are eager to modernize, but turning bold intentions around technology into execution is proving harder than expected. Even at these smaller organizations — often with leaner resources, different ownership structures and a more cautious approach to risk — demonstrating ROI on new systems remains one of the biggest challenges for CFOs.
When looking at SMB modernization efforts, 90% of the 1,003 small and mid-sized business financial decision-makers surveyed by financial operations platform Bill believe their business will be completely paperless within five years. While optimism around technology adoption is high, most of those surveyed also said they lack the tools to monitor their finances in real time.
Most respondents said they can’t access current cash positions on demand. This disconnect between ambition and execution is something CFOs know all too well and has become a major competitive advantage for those who have managed to get it right.
The conundrum of going paperless with bad data
Despite widespread optimism about going paperless, many SMB leaders remain bogged down by manual processes and limited financial visibility, according to the data. Among those who believe a fully paperless operation is realistic, 33% expect to reach that goal by 2026. Here, headcount plays a role. Forty percent of the largest businesses in the survey, those with 201 to 1,000 employees, are most confident in their ability to go paperless by 2026.
Data quality concerns are prevalent among SMBs, though they do not appear to be slowing modernization efforts. Nearly two-thirds of respondents said they cannot access current cash positions across their accounts. For a fifth (20%) of companies, access to real-time cash data can lag by days or weeks.
“The Bill report confirms one of the most critical priorities for CFOs and finance leaders — that is, better cash flow management,” said John Rettig, president and CFO of Bill. “Finance leaders are recalibrating and navigating a dynamic economic environment, and the ability to see, control, accelerate and leverage cash flow is one of the most powerful strategic levers businesses have.”
Some finance leaders argue data must come from a single source of truth, while others say that idea is unrealistic. Either way, inconsistent or incomplete data remains a common obstacle. Smaller businesses, possibly to compete with larger firms and retain talent, may be integrating technology into their core operations prematurely.
The issues these businesses are facing mirror problems many CFOs know firsthand. Multiple bank relationships were the most common challenge cited, followed by current technology limitations (29%), system integration issues (27%) and overreliance on paper (26%).
The accounting shortage’s ripple effect
As the accounting talent shortage has shifted from a seasonal issue to a year-round risk, SMBs may be feeling the strain more than most. Seventy-seven percent of companies said they are concerned about rising accounting costs, and six in ten (60%) say they may need to bring more work in-house. That contrasts with larger firms, which are responding to similar challenges by outsourcing.
Despite this, most SMBs still report strong and valuable relationships with their accountants. Data suggests that companies adopting automation and modern financial technology can close the talent gap by letting systems handle compliance while human professionals focus on strategic planning.
For CFOs at companies of all sizes, choosing accounting partners with a strong technology foundation without being swayed on services by overzealous salespeople may reduce staffing risks while improving the quality of financial guidance. For finance leaders at SMBs, the ability to identify strong talent will be just as critical, but from a different labor perspective. As larger companies outsource more, skilled accounting talent who might once have joined a large company may be available to those who know where to look.
