Many businesses have relied on technology for their survival over the past year. The Covid crisis has demonstrated its importance in terms of adaptability, scalability, and resilience, and for many, having the right tech has helped them do business.
It’s a critical time for small businesses and having the right digital tools to support recovery will continue to be essential. However, as South Africa slowly starts to recover, we must now consider the world we want to see on the other side. Businesses have made immense progress during the pandemic, as has the government in recent years. Both must maintain this momentum to propel the country toward success as we approach a post-pandemic world.
Data collaboration
Data is incredibly powerful, but it can’t be useful if kept in distinct, inaccessible silos. Many of the biggest improvements in quality of life for business owners that technology has enabled, are about the free movement of data between platforms.
Consider, for instance, the value of banks being able to access data from third-party platforms like Xero. Integrations like this allow your financial information to be shared almost instantly when applying for a loan – making compliance and your chances of securing one more likely. Xero and Nedbank recently launched a first-of-its-kind fully digital bank feed in South Africa to allow small businesses to automate the flow of financial data from their bank account to their accounting platform.
To continue the progress that we’ve made, the government, banks, financial institutions and fintechs must continue to collaborate and create new integrations.
Start with taxes
Filing taxes is one of the biggest pain points for businesses and a major drain on resources – especially now, as businesses are stretched thinner than ever – making this an important place to focus digitisation efforts.
There has been positive movement in this area already in recent years, and innovations like eFiling and SARS’s collaboration on automation and digital migration with tech companies are already having an impact. Recent SARS tax statistics revealed a higher tax collection rate in December 2020 for both personal income tax and corporate tax than the previous year.
Expanding the taxpayer base is a vital step in the short-term recovery and long-term development of our economy. Similarly, eFiling accounted for 81.2% of the total value of all taxpayer payments in the last tax year – a positive shift in the right direction.
These improvements demonstrate the power of technology to make life easier for small businesses and empower the national economy. However, there is more, which can be done. At Xero, for instance, we have recently developed a new suite of cloud tools to allow businesses to prepare, store and submit VAT returns directly to SARS from just one platform. This will mean greater efficiency, fewer errors, reduced admin, and will give businesses better control over their finances.
Preparing for a brighter future
South Africa has the potential to revolutionise the world of small business through digitalisation, and we are on the right track. Over the past year, businesses, along with government and banks, have embraced technology at unprecedented rates, and they must keep it up. Further digitalisation is the way forward for the country, and a better future for small businesses is within our reach.