Building Your Product Roadmap: The Strategic Value of Embedded Accounting

Businesses are quickly moving away from fragmented vendor relationships toward unified platforms that streamline their operations. This transformation is evident in market leaders like Shopify, which has expanded into financial services through Shopify Finance, and Toast, which provides integrated payment processing, payroll management, and capital access for restaurants.

Market Opportunity Analysis

Recent research from Adyen and Boston Consulting Group (BCG) highlights significant untapped opportunities in embedded finance. However, one key component often overlooked in these analyses is embedded accounting — a natural extension for any platform.

The Current State of Small Business Accounting

Small business accounting remains a complex, time-consuming challenge that diverts owners' attention from core business growth. Despite technological advances in many business operations, accounting practices often lag behind, relying on outdated methods or disconnected solutions. Research and analysis from Cornerstone Advisors revealed that SMB owners face a triple burden: they (i) spend excessive time on accounting tasks, (ii) pay substantial fees for services that don't fully meet their needs, and (iii) struggle with technology that fails to deliver the promised efficiency. This fragmented landscape creates a clear opportunity for platforms to step in with integrated solutions.

Time Investment

SMBs dedicate approximately 20 hours weekly to accounting functions, dividing their time between bookkeeping, invoicing, expense tracking, financial reporting, and tax management. Notably, 20% of owners spend over 30 hours weekly on these tasks, highlighting the substantial time burden these essential functions impose.

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Outsourcing Paradox

While 50% of SMBs outsource their accounting, these owners spend virtually the same time on accounting functions as those managing it in-house. This suggests current outsourcing solutions aren't effectively reducing the time burden on business owners, pointing to inefficiencies in the existing services.

Cost Impact

Small businesses spend an average of $11,000 annually on accounting services. For smaller enterprises, this can represent 13-20% of their overall revenue — a significant operational cost that impacts their bottom line and growth potential.

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Technology Fragmentation

The current technology landscape reveals deep fragmentation in accounting solutions. Over 50% of small businesses rely primarily on spreadsheets or manual processes for their accounting needs. Approximately 33-40% use accounting suites like QuickBooks, while 10% operate without any technology support. Another segment, comprising 14-23% of businesses, receives technology through third-party providers, further complicating the ecosystem.

Roadmap Implementation Approaches

Given these substantial challenges highlighted above in the small business accounting landscape, product leaders must carefully evaluate their approach to solving these problems. The path from identifying market pain points to implementing a solution requires strategic consideration of development resources, time-to-market requirements, and long-term scalability. As platforms assess how to address these accounting challenges, several implementation paths emerge, each with distinct advantages and tradeoffs.

Traditional Build, Buy, or Partner Options

A full accounting suite build could take at least 12 months or more and demands significant resources but offers complete control over features. Provider acquisition enables faster deployment but comes with higher upfront costs and potential technical debt. Third-party integration, while quick to implement, creates platform fragmentation and leads to revenue leakage to external providers.

The Fourth Option: The Embedded Solution

Embedding accounting functionality transforms the user experience through native platform integration, consistent interface design, and reduced context switching. This approach accelerates deployment while maintaining focused resource allocation and platform cohesion. The technical architecture supports scalability, reduces maintenance overhead, and enables flexible customization to meet specific business needs.

Product Impact

While the implementation approach sets the foundation for embedded accounting integration for your roadmap, the true measure of success lies in its tangible impact on both the platform and its users. Understanding these outcomes helps you build a compelling business case and set realistic expectations for other stakeholders. The data shows that platforms which successfully implement embedded accounting solutions see measurable improvements across multiple business dimensions.

Measurable Outcomes

The integration of embedded accounting creates a seamless workflow environment that reduces task switching and improves data accuracy across all accounting functions for your SMB users. In fact, “roughly 8 in 10 small businesses would be more likely to select an industry-specific software provider if it had all accounting functions integrated into one application.”

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This enhancement drives revenue growth through increased Average Revenue Per User (ARPU), opens new monetization opportunities, and extends customer lifetime value. By embedding accounting, your platform benefits from a seamless user experience, stronger user engagement, improved retention metrics, and clear competitive differentiation in the market.

Strategic Alignment

The integration of embedded accounting into your product roadmap easily aligns with broader market trends toward comprehensive business solutions. As the embedded finance sector continues to expand, platforms that offer integrated accounting functionality position themselves to capture increased market share and deliver enhanced value to their users. Those who move early in embedding accounting capabilities will establish themselves as market leaders, building deeper relationships with their users while creating significant barriers to entry for competitors.

This strategic addition to your product roadmap addresses clear market needs while strengthening your platform's value proposition in an increasingly competitive landscape. Forward-thinking platforms recognize that embedded accounting isn't just another feature — it's a transformative capability that reshapes how businesses interact with financial data, turning a historical pain point into a competitive advantage.

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