SMEs in India face several challenges in their day to day business activity. One of the biggest challenges for SMEs is their inadequate skillset to build internal business processes such as accounting, book keeping etc. Technology can add great value in streamlining this aspect of business. In an exclusive interview between BusinessNonstop.in and Nikhil Arora, Vice President and Managing Director of Intuit India, it was found that Indian SMEs are sitting on a great opportunity to grow their businesses by getting better equipped by financial management.
The edited excerpts:
What trends do you foresee in the Indian SME segment with regards to the adoption of automation of business processes like finance?
Technology is the catalyst that is required to drive growth in the Indian economy and hence, is also an important enabler for the Indian small businesses. Small businesses face several challenges and I strongly believe that technology can bring the much-required transformation. It can help them communicate with their customers, expand their reach in an increasingly mobile and online world, and become competitive in the global market place. In addition, the automation of business processes that technology enables can help overcome many operational challenges that small businesses face.
Financial management is essential for any small business’s growth and sustenance. We have observed that small businesses require quick, simple and reliable solutions to help them grow their businesses. QuickBooks, Intuit’s flagship small business financial and business management software, is a simple online software that helps business owners make informed, data-driven decisions on the go. It needs no professional accounting training and complies with managerial accounting standards, allowing small businesses to easily create localized invoices, pay bills and track expenses.
What are the key challenges you see in the area of finance management among SMEs?
We have found that as small businesses grow, accounting and bookkeeping become increasingly complex activities. Revenue fluctuations, rising manpower costs and increasing technology spends are some of the factors that affect the income flow in small businesses. Given their focus on growing their business, small business owners fail to maintain proper financial management systems and hence, finance management becomes a key challenge. Effective and stable financial management is an indicator of business performance. Most small businesses use basic accounting software requiring them to solve issues manually or outsource book keeping to external accountants. The small business owners we have spoken with have highlighted the need for solutions that help manage transactions and provide relevant data for more effective and informed decision making. I strongly believe that the use of technology can help with effective financial management.
How big is the market for Intuit in India?
With over 48 million small businesses in India, the market for Intuit in India is huge! Today, the market potential for QuickBooks is 2 million small businesses of which we have found the early adopters of are primarily the service based small businesses that have access to broadband – around 700,000 small businesses in India. These businesses are typically technology savvy, employing 5 to 25 employees from verticals like advertising agencies, IT consultancies, event management agencies, lawyers, architects, designers etc…
Accountants are a large influencer base for us; they are the most trusted partners of small businesses. In India there are about 120,000 charted accountants who are the potential users and recommenders of QuickBooks. These accountants server small businesses for their accounting, taxation, bookkeeping and audit needs. We have seen accountants are rapidly adopting technology and are looking for software solutions that help them better collaborate with their small business clients.
QuickBooks, our flagship product, has over 1.48 million users across 124 countries and has been trialed by over 50,000 users in India till date. In the accountant channel, we have seen an adoption rate of 49% over the last six months, primarily from the six key cities Chennai, Mumbai, Ahmedabad, New Delhi, Hyderabad and Kolkata. We are very encouraged by the traction we are seeing and by the response to our products so far.
Intuit is actively working towards spreading better awareness regarding technology adoption among SMEs. How is the journey so far?
Even with the very large number of small businesses in India, the reality is that only a fraction of them are online. Cloud technology is often perceived as complex or difficult to implement, and this is a myth we want to bust! Intuit has always focused on highlighting cloud technology as a viable alternative for businesses seeking to minimize capital expenses while still boosting productivity. Small business owners have also expressed concerns about network infrastructure and data security. While education and awareness is still needed to allay these concerns and increase the industry’s comfort level with the technology, we are seeing things change at a good pace. Cloud solutions are clearly the way to go for small businesses and I am confident that adoption rates in this sector going will continue to move up steadily in the months ahead.
Intuit has collaborated with the Government of India’s Ministry of Micro, Small and Medium Enterprises (MSMEs), ) to gain a better and more complete understanding of the barriers to technology adoption among micro and small business in India. Based on this study – Understanding and Overcoming Barriers to Technology Adoption among Indian MSMEs – we found that Indian small businesses are not leveraging the full potential of technology at present. Apart from identifying the barriers, the study also includes suggestions to help small businesses overcome these.
What future roadmap does Intuit wish to adopt for Indian SMEs?
Our vision is to be the operating system behind small business success in India. By 2020, we want 1 in 4 small businesses in India to be using Intuit products. We are already established as the small business ecosystem service provider in North America and we believe we can successfully replicate the model in India by helping small business and accountants grow their businesses and manage their finances, taxes, payroll and payments.