Small businesses face various challenges in today’s economy, such as raising new capital, increasing profits, controlling labor costs, dealing with supply chain challenges, and hiring new staff. However, new research conducted by Avalara and CPA Trendlines showed that 39% of accountants report their small business clients are performing ‘better’ this year compared to the previous year. Nevertheless, the survey also revealed that 61% of accountants expect small businesses to experience a ‘bad’ economic situation in the next 12-18 months.
The study also explored how economic conditions affect small businesses’ ability to access new capital, generate revenue, increase profits, manage labor costs, and hire new employees. Accountants are more positive about their small business clients’ ability to adopt new technology and automation. The economy over the next 12-18 months is both worrying and cautious, with 70% of accountants expecting it to be “very bad” or “somewhat worse.”
To navigate an uncertain economy, small businesses need accounting advice. Sona Akmakjian, Head of Global Strategic Accounting at Avalara, stated that accountants need to “strengthen client relationships, level up their valuable advisory skills, and leverage all the tools and resources available to support small businesses on the front lines.” Main Street accountants have a unique view of both the local economy and the national economy, making them better business advisors and understanding the new expectations from clients.