Trends Future of Small Business Accounting in the UK

Helping business owners make the most of new opportunities. In 2022, we predicted a year of significant changes, especially in accounting terms of sustainability and digitalization. As businesses continue to operate in a difficult economic environment. The ability to anticipate and respond to challenges and opportunities will be essential.

Accelerated by the pandemic, business owners have learned to be adaptive and agile. Which is equally important in 2023. To help you make the most of the opportunities ahead, we’ve compiled a list of the accounting top trends to watch and how to spot market vulnerabilities.

Many of the trends for 2023 focus on how small business owners can stay resilient and find ways to thrive, building on lessons learned in 2022 and during the pandemic. They also show how the changing business landscape in the UK is influenced by a range of economic, social, technological, ethical, and environmental factors.

Trend 1:

Affordable Durability

More than half of small and medium-sized enterprises [1] (SMEs) have invested in sustainability this year and plan to do more in 2023. One of the key drivers is changing people’s behavior. Consumption.

Deloitte reports that consumers are increasingly choosing to live more sustainably and buy only what they need due to concerns about the climate crisis and rising cost of living. 

They also choose brands that share their ethical and environmental values ​​and discard those that don’t, especially when it comes to the most frequently purchased products, such as food, beverages, clothing, home appliances, and beauty products.

Embracing circularity is an important part of the transition to sustainability, as is waste minimization. Consumers choose durable products that can be repaired and reused rather than just recycled.

However, affordability is also one of the biggest barriers to consumer acceptance of sustainability. 

As the cost-of-living crisis continues, consumers will seek more affordable, sustainable products and services, as well as more sustainable help and support. Small businesses are well positioned to offer more sustainable options – from locally sourced seasonal produce to trusted information and advice.

Trend 2:

Environment, Society, Governance (ESG)

Action Without Words:

Brands need to demonstrate their ethical credentials, not just talk about them. Rational consumer spending in the UK is on the rise, including in areas such as ecotourism and transport. However, building trust is especially important at a time when many consumers are wary of “green wash” and “social wash,” terms used when brands exaggerate information about their environment and society.

Aside from sustainability at an affordable price, ESG is seen as a major trend for small businesses in 2023. The ESG strategy shows what you’re doing to be environmentally and socially responsible and a strong and transparent company. ESG is not required for small businesses, but it still offers many benefits.

A study by the accounting firm Moore Global[3] showed that companies participating in ESG have seen their profits increase by about 9% over the past three years. From an investor perspective, your ESG strategy shows how you are minimizing risk and seizing new growth opportunities. For example, how do you plan to comply with environmental laws in the future? People want to do business with brands that share their values, whether as consumers, employees, suppliers, or collaborators. By focusing on your ESG strategy, you’ll show everyone, from investors to customers, why they should choose you as their trusted green company. It will also help you build on the main trend of 2022, which is purposeful marketing. 

As a Small Business Accountant, you can make a big difference, especially in your local community. ESG allows you to leverage your strengths and turn them into a tangible competitive advantage. Remember, staying agile will help you meet ever-changing consumer needs, including providing local support during the cost of living crisis.

Top tips for 2023:

There are many government-backed support programs available to small businesses that can help in ESG areas, such as carbon emissions reduction and ethical leadership.

Trend 3:

Green supply chain

Suppliers will be expected to contribute to the achievement of the brand’s sustainability goals. As the world moves towards net zero, brands are increasingly looking to go green in their supply chains. In the UK, 82% of companies are currently targeting net zero emissions by 2050.

Proving your credentials as a sustainable business puts you in a better position to be selected as a green supplier or partner. Plus, many of the top brands are committed to helping their suppliers become more sustainable, so you may not have to act alone. For example, the dairy cooperative Arla Foods says it will pay farmers more for milk if they meet the company’s new environmental sustainability goals. This kind of sustainable incentive is likely to become a major trend in the supply chain as brands seek to reach net zero.

Greening your own supply chain is also essential. Switching to eco-friendly suppliers will make your business more sustainable, but that’s not the only benefit. It can also help you innovate, grow, and sustain your business. 

For example, by introducing the next generation of sustainable materials into your products. Top tips for 2023:

Choosing local suppliers can help you solve problems like supply chain disruptions and strengthen your ESG credentials by reducing your carbon footprint. Remember that greening your supply chain can also involve outsourcing business processes.

Trend 4:

Deeper Digital Transformation

The pandemic has accelerated the digitization of small businesses. Research by Sage shows that 8 out of 10 SMEs now need digital tools to start, survive and grow their businesses across all sectors and regions in the United Kingdom.

In 2023, technology can help small businesses address a range of challenges and opportunities, from improving customer experience and improving operational efficiency to using data to increase sustainability. However, there are several barriers to more technology adoption, including a lack of time, expertise, and money to invest.

globally, digital trends for 2023 include more accessible and affordable artificial intelligence (AI) solutions, innovative Internet of Things (IoT), sustainable technologies, including greener data centers, and a more immersive digital world. Tapping into digital trends can give you a competitive edge or help you identify gaps in a new or existing market. It will also help you future-proof your business.  

HOWEVER

Data from ONs shows that while we are still spending more online than before the pandemic, consumers have also continued to shop in-store. This becomes even more important for small businesses to deliver a hybrid, omnichannel customer experience. Digging deeper into e-commerce trends will help you reach new and existing customers and uncover market gaps. 

For example, social commerce, e-commerce, and subscription commerce are all expected to grow. More payment trends will also continue to exist, including frictionless payment methods such as digital wallets and in-app payments, as well as Buy Now Pay Later (BNPL). Online and offline are merging, as consumers make an in-app purchase, then go to the store to pick up the item. 

Digital wallets such as Apple Pay and Google Pay are expected to account for 30% of all point-of-sale payments by 2023. BNPL is expected to account for about a quarter of merchant payments. E-commerce in 2026 as consumers seek flexible payment methods. Choose to help with the cost of living.

Top tips for 2023:

Government growth support:

Digital systems[9] can help and are now expanding to many smaller businesses. It offers free, unbiased advice and a £5,000 discount on investing in productivity-enhancing software. Including e-commerce, customer relationship management, and accounting software. 

Business view:

Grow your business with our largest and most accurate business database.

Trend 5:

Immersive customer experience

Creating enjoyable and inspiring experiences for your customers has always been essential, but it will become even more important in 2023. With the cost of living crisis, consumers may not be able to afford it. Will think more about where they spend their money and with whom.

The computer-generated environment gives small businesses the opportunity to transform the online customer experience.

From virtual tours that allow users to experience the real and planned space to product simulations that share your design and manufacturing journey.

For example, online furniture retailer Wayfair offers its customers a variety of shopping tools. From interior design advice to the ability to create a virtual version of your home via your smartphone so you can try it out before you buy, it’s all powered by augmented reality (AR) technology. ).

Top tips for 2023:

A rich customer experience will take your customers beyond your products and services and show them why they should choose you.

Trend 6:

Founder-led brand

You can be a company’s greatest asset – many investors are attracted to founder-led companies because of their expertise, leadership, and long-term thinking drive. You may also have started your business as a passion project or to solve a problem in your industry that gives you a clear goal and vision, and determination to make it happen. 

One of the ways to do this is through founder-led marketing, from sharing your story and mission as a founder to leveraging your expertise and becoming a thought leader in your industry, using platforms like social networks and podcasts.

Top tips for 2023:

The purpose remains the main trend for 2023, supported by a strong ESG strategy.

What is the next step? 

These trends are opening up new opportunities for small business owners, from the green economy and growing sectors like health and wellness to new trends in established sectors, like re-commerce in retail.

An in-depth accounting analysis of small business trends will help you identify potential gaps in the market. Data will be essential. For example, search engine data can help you find the products and services your customers are looking for. 

It can also accounting help you uncover challenges your business can help solve. At the same time, customer feedback data is a rich source of information, helping you improve your marketing, products, and services and identify emerging trends. This information is invaluable no matter what industry you operate in.2023 will be challenging but also full of opportunities for small businesses that are able to react quickly to changing trends.

How can they help? 

In another year of rapid accounting change, businesses will need to make sure they have the right protections in place, including business credit checking tools for new customers and suppliers, and control their finances to protect cash flow.

They provide tools and solutions to help small businesses make better decisions about their suppliers and customers, understand and manage their own business credit scores, and improve operations. 

Their marketing efforts using market-leading business data tools:

•  Experian Business Express allows you to perform a credit check and monitor any company you do business with, so you can spot signs of trouble early and make informed decisions.
•  With My Accounting Business Profile, you can view the full credit profile of your business, allowing you to understand what is affecting your business’s credit rating and preventing you from receiving funding. That is very important for your business.
•  Business View helps you quickly find new customers. Accounting Market your small business based on up-to-date business marketing data. Knowing that your data is segmented and targeted to the most profitable sales leads, you can reduce your marketing costs and run your sales campaigns with confidence.