Digital accounting: the brand-new hub for innovative fintech

Chip Mahan, VP, Global Payments and Banking at Sage

 

Professional accounting services and fintech might sound like a bit of an unusual coupling. But in reality, fintech providers are discovering new vertical market opportunities in the accounting space and propelling rapid growth through professional services.

The truth is that digital accounting and fintech complement each other perfectly. Businesses can incorporate payment and banking services into their accounting software to facilitate online payments, reconcile transactions and invoices, and even connect with banks to manage loans and investments.

This vertical integration has created a vibrant ecosystem of fintech partners driving service innovation. What’s more, these services can be scaled globally through partnerships with established brands, providing customers with automated processes that combine payments and banking with accounting, finance, and payroll. Here’s how accounting experts are helping to spearhead this accounting revolution alongside their tech partners.

 

The push for untapped tech adoption

One issue that’s long been a challenge for UK enterprises, and accountants in particular, is a relatively slow adoption of technology.

Modern digital tools help organisations to increase agility, improve communication and coordination, automate tasks to free up staff, and much more. Yet new UK research shows that the current level of technology used by small and medium businesses (SMBs) contributes less than half of its potential revenue. The study states that if SMBs leverage the full benefits of the technology on offer, they could unlock an extra £232 billion for a total UK tech use value of £448 billion annually.

Reasons for the relatively low uptake could be a hesitancy to depend on technology, insufficient awareness of its benefits, and a desire to do things ‘the way they’ve always been done’. But perhaps the main culprit is a lack of technologies that support the exact needs of the UK’s assortment of businesses and professionals. And it’s this scarcity that’s led to the growth of exciting, important partnerships between professional service providers and fintech innovators.

 

Disruptive digitisation

Digital accounting software has evolved exponentially in the last few years, automating everything from bookkeeping to tax and compliance. This has coincided with the recent boom of self-service technology, particularly during the pandemic, meaning that customers now expect all their money transfers, payments, loan management, and banking to be simple, secure, and immediately available 24/7. This is reinforced by numerous industry disruptions like digital challenger banks, and new regulations such as Europe’s Open Banking and the UK’s Making Tax Digital.

Partnerships between digital accounting providers and fintech experts allow for the creation of specialised software that automates and digitises financial services. Working with hundreds of tech partners, companies can bring innovative solutions to market far faster and support users of their existing products and services with upgraded functionalities and transformative app integrations. This hub of innovation offers fintech providers the unfettered freedom to work on inventive new ideas and develop ground-breaking features, safe in the knowledge that their partner’s vast customer base is waiting to buy into them.

With new products now tailored to suit countless vertical use cases, these fintech companies can extend their reach, create fresh business models, and tap into new revenue streams. Culminating in state-of-the-art products that deliver all-in-one solutions to help customers plug into everything from eCommerce to digital banking.

 

Supporting customers to save time, money and worry

To unlock the mutually-beneficial opportunities, leaders in the accounting and financial technology spaces are now forming multiple tech partnerships, working on everything from niche new features to comprehensive platforms.

Recently, Sage partnered with Lloyds Bank and Satago to offer fast, flexible access to cash based on the value of unpaid invoices, regardless of payment terms, to help businesses to manage and protect their cash flow. The company also joined forces with Tide to build a complete end-to-end accounting and tax solution for small businesses. With this new service Tide members can enjoy integrated, automated accounting and bookkeeping services from within their bank account, helping them to gain better control of their accounting while staying compliant and avoiding penalties.
It’s these types of collaborations that are helping to drive the sector in bold new directions. They’re simply a win-win for all types of organisations – the sharing of knowledge, skills, and resources consistently results in thrilling innovations, stronger value propositions, and accelerated mutual growth. Meanwhile, customers get to enjoy brand-new products and services that transform their day-to-workloads. As new partnerships continuously pop up with fresh creations, it’s an incredibly exciting time to be a part of the digital accounting and fintech industries.

 

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