By Amanda Thompson
Accounting professionals are well aware of the challenges their small business clients face, regardless of the industry, geographical location, or economic climate. The 2025 Intuit QuickBooks Small Business Index Annual Report offers valuable insights that can help you not only assist your clients in achieving their goals, but also provide strategic advice on a range of issues.
Here are six insights from the report to consider as you guide clients through 2025.
Debt Sources Shift: Short-Term Growth and Long-Term Risks
Small businesses, often seen as higher-risk borrowers, are finding it increasingly difficult to access credit, and when they do, it comes at a higher cost. The 2024 report highlighted a critical trend: Credit cards were a primary source of financing for small businesses, surpassing all other forms of financing. Entrepreneurs were not only using credit cards more frequently, but also carrying higher balances and incurring greater interest payments. This year’s report shows that credit card use as an essential source of financing remains unchanged and delves deeper into the long-term shift in the small business credit market. Traditional long-term borrowing from financial institutions continues to be increasingly replaced by credit cards and fintech lenders, leading to unique challenges, particularly as small businesses face the largest unexpected interest rate hikes in two decades.
Marcus Dillon, owner and founder of Dillon Business Advisors, and a member of the Intuit Partner Council, emphasizes the impact of this trend.
“When small business owners allocate more budget to loan and interest payments, less cash flow is available for investing in new team members, technology, or marketing,” he said. “The significant year-over-year decline in U.S. small business employment, the largest since 2015, underscores the impact of higher interest rates and inflation on hiring. Small business owners must closely monitor these factors to determine the best path for revenue growth and profitability.”
Debt management, forecasting, and ensuring compliance with loan companies will become increasingly important advisory topics for accountants in the coming years, and helping them navigate these challenges will be crucial for their long-term success.
Banking is Center Stage
Accountants should be well-versed in how their clients’ preferred banks are positioned, because traditional banks have reduced their supply of longer-term loans and diversified their offerings with more credit card products. The report reveals that small businesses working with banks whose finances were not improved by higher interest rates received less access to financing compared to those working with banks whose finances improved.
Clients look to you for banking advice, so the options available to your clients from their preferred banking partners—especially those often viewed as higher-risk borrowers—can significantly impact a loan. Some banks have managed to sustain negative impacts from higher interest rates by offering higher credit card limits to their small business customers. However, this may introduce longer-term risks to your clients. Managing debt and cash flow will be key to their success.
Hiring Post-Pandemic Remains Fluid
Small business owners have become more risk-averse in their hiring and investment decisions. Despite improvements in inflation and revenue, the Small Business Index shows employment numbers for small businesses are still below pre-pandemic levels in some sectors and regions.
Financing has allowed businesses to continue hiring based on short-term cash infusions. However, payroll advisory will be a critical area of growth for firms as clients assess how to address staffing concerns. You can play a vital role in helping clients navigate these challenges by providing strategic advice on hiring and payroll management.
Technology = Adaptability
Technology has emerged as a crucial buffer, enabling small businesses to adapt quickly to challenges and the marketplace; in fact, the Index shows that the pandemic demonstrated that tech-enabled businesses are more resilient. For example, small businesses using cash flow reporting, management applications, and e-commerce tools experienced faster growth by early 2021 compared to those lacking such resources. Further data from the Intuit QuickBooks Small Business Insights survey supports these findings, showing that digital tools improve efficiency, reduce costs, and mitigate errors—all critical factors for businesses operating in an unpredictable market.
“What jumps out at me in this report is that small businesses that go digital grow faster than those that don’t,” said KC Eames, director of Client Advising Services at Dark Horse CPAs. “Accounting professionals need to be looking for ways to help launch our clients into the digital age as much as possible. It’s not just for our benefit and ease of working with them; it’s for the success of their ventures, too.”
As various market factors fluctuate, advising clients on transitioning their manual and analog processes to more high-tech solutions and digital strategies can better position them for success.
Accounting Software’s Effect on Digital Tools
The report revealed that accounting and financial software are viewed as the most useful and valuable among these digital tools, with benefits in improving efficiency, followed by saving time and reducing errors.
The report also found that recommendations are crucial when a business owner is considering changing their technology. Providing tech stack recommendations that streamline workflows and are cost-effective will help your clients make smarter technology decisions.
AI is not Optional
Understanding the AI tools your clients use and how they are integrating them into their accounting and financial software is no longer something to ignore. Nearly 50% of respondents indicated that AI has been a valuable tool for enhancing productivity and positively impacting their work efficiency.
Addressing AI knowledge gaps is a worthwhile investment for your firm, your clients, and the accounting profession. As software evolves, it’s important to know how to guide your clients, while also gaining an understanding of how AI can improve efficiencies in your workflows.
Insights for 2025
You know your clients and are well-versed in their challenges. This year’s report provides valuable insights for businesses and offers guidance to help you set your clients up for success. Continue to visit the Firm of the Future blog for continuous updates on technology, practice management, advisory, and a variety of other topics. By staying informed and proactive, you can help your clients navigate 2025 and achieve their goals.
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Amanda Thompson works on the Intuit Accountant team, developing content relevant to the accounting industry. Prior to joining Intuit, Amanda worked in marketing at a Top-40 accounting firm where she developed and amplified the firm’s digital presence and thought leadership content. She has also created content for national brands, code schools, and nonprofits.
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Tags: Accounting, Advisory, CAS, Small Business
