MYOB highlights links between digitisation and Australia's economy
Small businesses in Australia are failing to digitise and the nation's economy is losing out as a result, according to business management platform MYOB.
According to research from MYOB, nearly half a million Australian SMEs have no or very low levels of digitisation in their business, and getting them online would be worth a $10 billion injection to the Australian economy.
MYOB calculates 466,062 SMEs, approximately 20% of the 2.29 million sector, are not engaged with digital tools across critical areas of their business workflow, such as compliance and supplier management.
The research delves further into typical digital use among the small business community, finding 40% of businesses use digital cloud-based software for work in progress (WIP) management, 38% for managing their people and 37% for growth opportunities, such as marketing.
Furthermore, MYOB finds that 26% of SMEs are connecting with their customers on social media.
With SMEs with advanced levels of digitisation 50% more likely to grow revenue, MYOB views support packages that bridge the digital gap for the one in five left behind as an economic imperative.
MYOB forecasts a 1.8% increase in the SME GDP contribution, or a $10.5 billion gain for the Australian economy, if remaining SMEs are brought up to speed.
MYOB chief employee experience officer Helen Lea says, “The most effective tool Government has at its disposal is the tax system and cloud-based software as a service (SaaS) products are the perfect gateway for SME digitisation."
Lea says, “Our new research tells us 24% of SMEs are worried new technology is too expensive and a further 24% don't have the time to set it up.
"Of the businesses who digitised during the pandemic, 39% found themselves to be more productive and 34% were more profitable. 85% said they were able to keep their business running thanks to digital tools."
According to Lea, for the one in five SMEs at risk of being left behind, a tax incentive that is easy for businesses to engage with, that is pointed out to them by their accounting and bookkeeping advisors with whom they speak regularly, will remove a significant hurdle to digital adaptation.
She says, "Our research supports this: 27% of respondents shared that an incentive, such as a tax deduction, would help them get started.
“SaaS model software is custom built for the SME way of working. Cloud-based SaaS products allow businesses to work however and wherever they like and the subscription model allows a business to grow their software use with their operations."
MYOB also offered a recommendation to Government based on the findings.
Lea says, “We are recommending to Government that they consider a refundable rebate on new SaaS subscriptions for SMEs with 0-199 employees, with a tiered incentive structure to promote end-to-end digitisation of businesses.
"This change alone we predict is worth $10.5 billion to our economy in the short term.
“If you combine this with the annual saving of $23.5 billion afforded by a mandatory introduction of B2B eInvoicing, adoption of which could also be motivated by this SaaS incentive, it's a pretty compelling case for putting our trust in small businesses as Australia's economy recovers and grows.