Technology In Accounting

This research is based on a national survey of 500 Canadian small and medium-sized businesses, conducted by Zenbooks in partnership with Abacus Data. Respondents included business owners and senior decision-makers across industries and regions in Canada. The survey, conducted June 16 and July 7, 2023, captures the responses of 500 participants based in Canada. Every participant is an SME owner responsible for their business finances. The data is weighted by region. The margin of error for a comparable probability-based random sample of the same size is +/- 4.35%, 19 times out of 20.

Listing of findings

• 59% of SMEs selected inflation as a biggest business concern.
• 46% of SMEs selected the competitive environment as a biggest business concern.
• 37% of SMEs selected cost of labour as a biggest business concern.
• 27% of SMEs selected the labour market as a biggest business concern.
• 26% of SMEs selected technological change as a biggest business concern.
• 16% of SMEs selected the political landscape as a biggest business concern.
• 21% of SMEs said their current business goal is to grow the business quickly.
• 44% of SMEs said their current business goal is to grow the business slowly.
• 26% of SMEs said their current business goal is to maintain the business as it currently is.
• 8% of SMEs said their current business goal is to prevent the business from declining.
• 38% of SMEs said all their time is spent serving customers and managing the business day to day.
• 40% of SMEs said they can spend some time growing their business.
• 22% of SMEs said they have just enough time to think about how to grow their business.
• 34% of SMEs reported paying bills causes at least a moderate headache (moderate to severe).
• 34% of SMEs reported managing cashflow causes at least a moderate headache (moderate to severe).
• 32% of SMEs reported pulling together multiple sources of financial data for reports causes at least a moderate headache (moderate to severe).
• 30% of SMEs reported preparing monthly financials causes at least a moderate headache (moderate to severe).
• 28% of SMEs reported reviewing reports about their business’s finances causes at least a moderate headache (moderate to severe).
• 27% of SMEs reported applying for or managing loans causes at least a moderate headache (moderate to severe).
• 23% of SMEs reported dealing with their accountant or bookkeepers causes at least a moderate headache (moderate to severe).
• 21% of SMEs reported running payroll causes at least a moderate headache (moderate to severe).
• 36% of SMEs reported using QuickBooks Online.
• 33% of SMEs reported using QuickBooks Desktop.
• 53% of SMEs reported using QuickBooks (Online and Desktop combined).
• 17% of SMEs reported using Sage.
• 8% of SMEs reported using Xero.
• 62% of SMEs said the owner does all bookkeeping.
• 22% of SMEs said bookkeeping is done by an in-house employee.
• 6% of SMEs said bookkeeping is done by an online or virtual bookkeeper.
• 10% of SMEs said bookkeeping is done by a freelance bookkeeper who drops by.
• 36% of SMEs said their year-end tax compliance is done by a traditional accountant or accounting firm.
• 41% of SMEs said they do year-end tax compliance themselves.
• Among SMEs using an external provider, 94% said the external provider does their year-end tax.
• Among SMEs using an external provider, 32% said the external provider does monthly bookkeeping.
• Among SMEs using an external provider, 9% said the external provider provides cash-flow projections.
• Among SMEs using an external provider, 6% said the external provider does a monthly Zoom call or check-in.
• Among SMEs using an external provider, 21% agreed they have outgrown their current accountant (strongly agree or agree).
• 21% of SMEs said they changed how they do accounting in the past two years.
• Among SMEs who changed how they do accounting, 51% said the change was to use accounting software.
• 32% of SMEs said they are very satisfied with how their accounting and bookkeeping are handled.
• 68% of SMEs said their bookkeeping, accounting, and payroll are mostly or entirely digital.
• 64% of SMEs said they have heard of cloud-based accounting before today.
• 66% of SMEs said cloud-based accounting would be very or somewhat valuable to their business.
• 47% of SMEs said cloud-based accounting would save them a great deal or quite a bit of time and money.
• 52% of SMEs said use of cloud-based accounting solutions will increase in the next few years.
• 67% of SMEs rated cloud-based accounting better than traditional for data sharing (much better or somewhat better).

See complete research report here

How to cite this study

Journalists, researchers, and policymakers are welcome to cite data from this research.

Study name:
Technology in Accounting

Publisher:
Zenbooks

Research partner:
Abacus Data

Methodology:
National survey of 500 Canadian small and medium-sized businesses
Fielded June 16 to July 7, 2023

Suggested citation language

For articles or reports:

“According to the Technology in Accounting study by Zenbooks, conducted in partnership with Abacus Data…”

or

“Data from a national survey of 500 Canadian SMEs by Zenbooks shows…”

For shorter references or data call-outs:

“Source: Technology in Accounting study by Zenbooks.”

Attribution guidance

When citing individual statistics, please attribute the data to:

Zenbooks, Technology in Accounting study (2023)

Where possible, link back to this page so readers can access the full methodology and data context.

Critical Technology Trends in Accounting:

Our study surveyed Canadian small business owners, uncovering transformative insights at the intersection of accounting technology and business growth. Explore our key findings and understand why embracing digital accounting is more than a trend – it’s a business imperative in today’s economy.

Key Technology in Accounting Findings:

1. Growing Divide:

A substantial portion of small and medium-sized business leaders, 1 in 3 (32%) of all SMEs surveyed, feel they have outgrown their accountant. Only one-third of small and medium-sized business leaders (32%) reported being “very satisfied” with how their accounting and bookkeeping needs are currently addressed. This number drops significantly to only 24% among younger business owners seeking to expand their businesses.

2. Technology Adoption:

Younger business owners, those under 45, are embracing online accounting firms and technology at a higher rate than their older counterparts. They are nearly twice as likely to perceive value in cloud-based accounting (88%) compared to the older generation (47%).

3. Business Challenges:

The most common headaches for businesses are paying bills (34%) and managing cash flow (34%). Surprisingly, traditional accounting firms do not typically offer services that directly address these challenges, while modern accounting firms do.

4. Age and Growth:

Younger businesses tend to experience more growth-related challenges, with the most significant headaches occurring during the growth phase. Businesses under 45 are nearly twice as concerned about labor costs compared to older business owners.

5. In-House vs. Outsourced:

Younger businesses are more likely to hire in-house employees or online/virtual bookkeepers to manage their accounting needs, possibly reflecting a shift in their approach to accounting expertise away from traditional accounting firms. Business owners who are very or fairly profitable, are 12% less likely to use a traditional accountant or accounting firm than those who are breaking even or unprofitable.

6. Digital Transformation:

Accounting is increasingly being done digitally, especially among the younger generation (82%) and businesses aiming for growth (75%). However, businesses experiencing stagnant or decreasing revenue are more likely to use analog methods.

Navigate through an interactive journey of our study, featuring graphs, charts, and real-life testimonials from business owners who have embraced digital accounting solutions.

Stay ahead in a digital world and follow us on our Small Business Big Insights Podcast or on our socials (Facebook, LinkedIn or Twitter) for the latest updates and insights in accounting technology.

Have questions or need expert advice on digital accounting for your business? Connect with our team of professionals at Zenbooks.

About Zenbooks:

Zenbooks is a forward-thinking accounting firm dedicated to helping businesses thrive in the modern era. With a focus on cutting-edge technology and personalized service, Zenbooks empowers business owners to achieve their financial goals. Through a combination of expertise, innovation, and a commitment to excellence, Zenbooks stands as a trusted partner in financial success.