Shifts in regulation, persistent price pressures and a strained economy are making the operating environment feel difficult. However, there are also signs that small businesses have learnt a lot from the disruptions of the past few years and continue to flex their resilience muscle. Many are proactively looking further ahead and seeking out support, with our Accounting and Bookkeeping Industry Report 2025, revealing that strategic planning and advisory services accounted for nearly a third (32%) of practices revenue last year.
As the wayfinders of small businesses, accountants and bookkeepers are thinking beyond the numbers and offering everything from cash flow forecasting to financial planning, tax strategy and scenario modelling. They understand a business, its inputs and all the factors that can impact demand, and this deep insight is powerful. It helps small businesses to plan for what’s next. Whether that’s investing in their teams and equipment to take advantage of untapped opportunities or preparing for slower months so they can cover day-to-day costs without facing serious cash flow crunches.
Human-to-human connection
The human-to-human connection between accountants, bookkeepers and small businesses is symbolic of a wider shift in their relationship. New tools and technologies are enabling deeper collaboration, with automation and cloud-based technologies helping to optimise workflows.
Our research shows that 59% of bookkeeping work is now delivered using the cloud, with 40% of practices using connected bank feeds, 33% payment tools and 31% data capture tools for their clients. The benefits of this adoption are clear. Among practices using cloud tools, 87% report better client satisfaction, and 41% believe it has enabled them to improve the quality of their client service. Technology is increasingly helping practices serve small businesses more effectively and build stronger trust and engagement – it supports small businesses in taking greater control of their finances so advisors can focus on ways to help them thrive.
One thing that holds the potential to make the relationship between accountants and bookkeepers and small businesses even stronger is Making Tax Digital for Income Tax (MTD for IT). Many practices will use it as an opportunity to transform the way they work with small businesses and technology is likely to remain a key area of focus as both sides prepare for the regulatory tailwinds.
Preparing for MTD for IT
From April 2026, digital recordkeeping and quarterly submissions will become mandatory for self-employed businesses and landlords earning over £50,000 a year. It’s a major shift that will require small businesses to adopt good digital habits. For many, it will give them real-time digital information on their taxes for the first time and support them in being able to plan for the future.
Encouragingly, 75% of accounting and bookkeeping professionals feel positive about the reform, and many see it as a welcome push towards digital transformation. Over four in five believe it will lead to happier clients (81%) and open up new client opportunities (82%). The perceived benefits for small businesses are also clear. According to those surveyed, the main benefits of MTD for IT on small businesses include improved accuracy in tax reporting (46%), streamlined processes and increased efficiency (43%), and simplified tax compliance (42%).
It might still seem like a long way off but there’s a lot to consider so now is the ideal time to start getting ready and kick things into high gear. Preparing for MTD for IT will involve closer collaboration between accountants, bookkeepers and small businesses, especially around data collection, submissions and communication. It’s likely that business owners will take on some aspects of digital recordkeeping, supported by their accountant for more complex tasks and final submissions. With the right digital tools and communication in place, this can be a smooth and empowering shift, rather than an added burden.
Taking the lead
Ultimately, MTD for IT is more than a compliance update. It’s a chance for small businesses to simplify processes, improve record keeping and build a stronger relationship with their advisors. The move to more regular, digitalised reporting holds the potential to deliver new productivity gains and benefit from an improved understanding of business financials. However, it will take time to adjust so now is the time to start preparing. Start by speaking to your accountant or bookkeeper, asking about readiness for MTD and explore how digital tools can help. With the right support in place, this change could mark the start of a simpler, more streamlined way of working.
