As humans, we tend to have a funny relationship with change. Objectively, we understand that it can add infinite value to our careers and personal lives. But, let’s face it, the unknown can also prove a little daunting. Change is indeed coming for Australia’s 730,000 small business owners with less than 19 employees. With the ATO legislation for Single Touch Payroll (STP) in effect from 1 July, they will now be required to digitally report their payroll via STP-enabled software. However, with under one month to go, thousands across the country are still yet to get started.
In response, the Xero team polled a series of small business owners on their attitude towards change management and technology adoption as part of our ‘What’s STPing you?’ research (aka ‘What’s stopping you?’). We discovered an overwhelming tension between their enthusiasm for the potential of technology and the barriers to adoption that stop them from taking the next step. Nowhere is this sentiment more relevant than in the lead up to STP, with respondents revealing a range of barriers to the adoption of digital tools in their business, including a lack of understanding (40 percent), resourcing (24 percent), time (15 percent) and trust (13 percent).
Navigating the new and determining cause for concern
Here at Xero, we believe in the power of innovation. And our research shows that many small business owners feel the same way. An impressive 64 percent said they embrace any changes that will help them work smarter or faster, with a further 40 percent agreeing that change is, in fact, “As good as a holiday.” While seventy-five percent supported the idea that Australia should become a more innovative country.
Yet despite the progressive attitude they displayed towards technology, more than half of the small businesses surveyed said they did not know what STP was. While another one in five mistakenly believed that STP did not apply to them. And 11 per cent revealed that they’re not yet compliant. Why might this be the case? The answer is all too simple: small business owners are often run off their feet, and don’t have the bandwidth to stay on top of every new development.
Preparing for change and embracing the digital future
In order to increase the uptake of STP, it’s important that we connect the need for change to a clear benefit that small businesses can achieve. In this light, advisors need to work with small business owners to help them understand that STP adoption will provide a major boost to their business across a range of measures – from efficiency to time saving and accuracy. Ultimately, it is the role of government, accountants and bookkeepers to help small businesses navigate regulatory changes and discover that switching to STP isn’t nearly as complex as it may seem. Change is coming, and this time, it’s for the better.