From Pain to Profit: How Product Leaders Can Address Small Business Burdens Through Embedded Accounting

Running a small business is no small feat. It can be described as one of the hardest things someone can do, as many owners and leaders often wear multiple hats to get things accomplished. From running marketing to increase growth to organizing operations to keep the business afloat, the tasks and challenges are endless. We took a closer look to see what the top challenges for small businesses are this year in comparison to last:

Top Challenges for Small Businesses in 2024

1. Inflation
2. Quality of Labor
3. Taxes
4. Cost of Labor
5. Government Regulations
6. Cost/Availability of Insurance
7. Finance and Interest Rates
8. Poor Sales
9. Other
10. Competition from Large Businesses

Notably, 50% of these issues represent the area of finance. According to the U.S. Bureau of Labor Statistics, "1 in 5 small businesses fail within the first year due to poor financial management and lack of capital." Finance is interconnected in all parts of your customers' businesses and is arguably the most important component in running a business. So how do you build a solution into your platform to help your customers?

Your platform likely helps solve some of the operational issues your customers face like appointment setting, messaging customers, managing time, and more. But as we mentioned earlier, the topics related to finance and accounting represent the top challenges. How is your vertical SaaS platform helping to address these?

The Financial Burden: Costs Associated with Accounting Today

Costs for Your Customers

Your customers are spending on average over $9,000 dollars per year on accounting and bookkeeping services. This may vary more depending on the size of your customer's business and their annual revenue. This also may not include any other integration or services fees and the time/resources it takes to organize and manage this information.

Here's what Cornerstone Advisors found:

Accounting isn't a nice-to-have — it's a must-have for every business. Just looking at the average costs above, there's clearly a revenue opportunity for you to embed these accounting services into your platform. This is especially true since Cornerstone Advisors also found that 79% of small business owners would be more likely to select an industry-specific software provider if it integrated all accounting functions.

On top of that, your customers are also paying a fee to your platform to help manage and run other parts of their business. Quickly looking across industries, this can range from $60-$500 a month, again depending on the size and needs of your customer's business.

Your customers are looking for a one-stop, industry-specific solution to help alleviate the burdens of finance and accounting. So how can you help?

Streamlining Financial Operations: Embedded Accounting API for SMB Platforms

Maybe your platform already has an integration with QuickBooks. However, that is only a temporary bandaid to the problems your customers are having and likely causing headaches for both you and your customers. Integrations can often be quick, but temporary fixes. They send your users outside of your platform, create a disjointed experience, and can cause delays in financial data.

This is where embedded accounting for niche markets comes into play. By leveraging an embedded accounting API for your vertical-specific platform, you can provide a seamless, integrated solution that keeps your users within your ecosystem while addressing their critical financial needs.

Benefits of Embedded Accounting API for SMB Platforms

1. Tailored Solutions: Embedded accounting APIs can be customized to fit the specific needs of your industry, providing specific features that generic accounting software can't offer.
2. Improved User Experience: Keep your customers within your platform, eliminating the need to switch between multiple applications and reducing friction in their daily operations.
3. Real-Time Financial Insights: With embedded accounting, your customers can access up-to-date financial data directly within your platform, enabling better decision-making.
4. Increased Revenue Opportunities: By offering embedded accounting services, you can tap into a new revenue stream while providing added value to your customers.
5. Competitive Advantage: Differentiate your platform from competitors by offering a comprehensive solution that addresses one of the most critical pain points for small businesses.

Implementing Embedded Accounting in Your Vertical SaaS PlatformTo successfully implement embedded accounting in your platform, consider the following steps:

1. Identify Your Customers' Specific Needs: Understand the unique financial challenges faced by businesses in your niche market.
2. Leverage a Proven Embedded Accounting Provider: Look for a proven accounting solution that offers flexibility, scalability, and industry-specific features. In fact, Tight provides a superior approach to what your customers want.
3. Seamless Integration: Ensure that the embedded accounting features blend smoothly with your existing platform functionality and provide the same level of customer support and uptime.

Turning Pains into GainsBy addressing the accounting burdens of small businesses through an embedded accounting API, product leaders can transform a significant pain point into a profitable solution. Not only does this approach streamline financial operations for your customers, but it also positions your platform as an indispensable tool for their business.As the demand for industry-specific, all-in-one solutions continues to grow, embracing embedded accounting for your specific market isn't just an opportunity – it's a necessity for staying competitive in the vertical SaaS landscape. By doing so, you'll not only boost your platform's retention but also contribute to the success and growth of the small businesses you serve.