The growth of the UK economy depends on the strength of our small and medium sized businesses. Accounting for three fifths of employment and around half of turnover in the UK private sector, the success of our SMEs indicates the health of our wider economy and when they grow and thrive, so do we. For many SMEs, growth remains difficult in the current climate of rising business costs, complex regulation and a persistent talent shortage. Ahead of the Budget, the Treasury is considering tax breaks for small businesses to ease financial pressures. This includes re-evaluating the Enterprise Management Incentive (EMI) to include small businesses who have more than 250 employees and £30m in assets – a move that would be widely welcomed.

Whilst these tax breaks would provide breathing room for SMEs, truly unlocking long-term productivity and growth would require businesses to consider their level of technology adoption, something firmly within their control. Below I’ve outlined three ways sector-specific software can be used to solve common problems of SMEs so that they can make the most of the proposed tax breaks and take back control of their business and legacy.

Getting on top of finances
Late payments are still a huge financial drain for a lot of independent businesses. Many small business leaders juggle multiple roles and responsibilities, meaning that finances are often dealt with around dining tables at home when the working day is done. Manual management of business finances can often lead to late payments falling under the radar – a burden that on average costs small businesses £22,000 a year and contributes to 50,000 annual business closures in the UK. The root of the problem often lies in relying on basic tools like spreadsheets or paper diaries, which quickly become unsuitable as a business grows.

Embedded payment solutions (payments acceptance built into a software solution) are a seemingly simple tool which allow SMEs to automate these financial processes, especially when designed with your industry in mind. For example, we’ve seen this be helpful for our trades customers. Having the ability to send a
payment link on the job before leaving a customer’s home increases the likelihood of payments being made on time and decreases the amount of time the office spends calling and chasing customers. Similarly, for the many healthcare practitioners using our software products, taking payments at the time of online booking by a patient reduces no shows and lost revenue.

Navigating red tape
Beyond cash flow concerns, small business owners are often overwhelmed by complex regulatory compliance which can also stand in the way of success. A recent survey by Accountancy Age found that one in five business leaders cited regulation as a key barrier to their growth. Staying on top of changing compliance obligations – especially for fast-growing and time poor SMEs – can be difficult. Implementing a sector-specific business management platform from a trusted partner that deeply understands the sector a customer operates in and builds industry regulation and compliance into the workflows means SMEs don’t have to worry about it. For healthcare businesses, this means collecting the right information and consent to protect your business and patients, meanwhile for hospitality businesses, they can better adhere to health and allergen laws. Having all this data in one place enables businesses to produce complete encrypted reports on demand for regulatory bodies but also helps improve transparency and trust with customers.

Setting the stage for AI
AI is disrupting technology at an unprecedented pace and can supercharge businesses like we’ve never seen before. Many businesses are increasingly looking at how it can help them become more efficient and accelerate their growth opportunities. In fact, recent research by Google found that AI-powered tools could add £198bn to the SME economy through productivity gains. One of the most transformative ways SMEs can use AI to unlock growth is by turning customer or business data into actionable insights. This means making more revenue from promotional moments – like Black Friday – or even using weather data and customer trends to identify demand peaks and inform inventory or stock management. That said, many small and mid-size companies are unsure where to start or how to tap into new technology that simultaneously feels exciting and daunting. But to really see the transformative power of AI, businesses should start by leveraging the knowledge of their software partners to better understand where the opportunities are and how data can be turned into competitive advantages. Without starting with the core business critical management tools, the transformational impact of AI is limited.

Unlocking real growth with technology
The trajectory of the UK’s economy rests on the ability of SMEs to grow. While financial incentives by the government, including tax breaks for SMEs, would be a welcome measure to ease fiscal pressures, they only represent a part of the solution. True, sustainable growth demands a strategic commitment to digital transformation – whether that’s by mastering the basics of sector-specific management software to overcome ongoing challenges or integrating cutting edge technology like AI to find new growth opportunities.

This dual strategy – government support matched with technology adoption – allows SMEs to automate admin tasks, improve efficiency and accuracy and reclaim valuable time that can be better spent thinking about new market opportunities. This is the clearest path to unlocking long- term productivity and growth.