Small biz hasn't given up on paper for accounting

A recent report has found that while accounting software and apps remain the dominant way small businesses record and manage transactions, there has been a material dip in usage between April 2023 and July 2024.

This is according to a recent survey conducted by Intuit QuickBooks. When originally asked in April 2023, "What system do you use to record and manage financial transactions at your small business?" those saying they use accounting software or apps made up 85% of the sample. When the same question was asked this past July, however, this proportion dropped to 68%. This population did not suddenly collapse at that time; much of the loss happened between April and July of last year, when it dropped to 71%, but there has been a steady dip in accounting software users since then.

There were similar drops in Canada, going from 95% to 66%, and the U.K., going from 94% to 69%. Curiously, there was no such drop in Australia; 65% of accountants there used accounting software and apps last year, and 65% still use it this year.

Part of this drop might be due to fewer taking on new digital tools. Between July of last year and July of this year, the proportion dropped from 38% to 25%.

So then, what are people doing instead of using specialized accounting software? It's not spreadsheets, the second most popular answer, which saw usage drop slightly from 45% to 43%. Instead, more are (to the horror of their accountants) using paper and pen, going from 18% to 23%. The rise of ERP software may have also taken a bite, its own use rising from 1% to 6%.

Despite the decreased use of accounting software, though, accounting software and apps remained the digital tools valued the most by small businesses. When asked, "Which digital tools are most useful for your small business?" the highest answer, at 36%, was "accounting software/app." This was materially higher than the next best answer, a business website, which scored 29%.

Incidentally, the least useful digital tool cited by small businesses was AI, at merely 4%. Not a lot are using it avidly: only 15% in the U.S. report they are daily users, versus 40% who say they never use AI. Still, people aren't completely against artificial intelligence technology: 13% said it was either somewhat or very unhelpful versus 46% who said it was either somewhat or very helpful.