may2021 - 13

SPONSORED CONTENT
Intuit QuickBooks Report Shows U.S. Small Businesses
are On the Road to Financial Recovery
A NEW REPORT by Intuit QuickBooks provides one of the
most complete assessments available of the pandemic's
impact on U.S. small business revenue and indicates U.S.
small businesses are on the road to recovery from the
financial losses experienced during COVID-19.
The report, Intuit QuickBooks Small Business Recovery, uncovers the impact
COVID-19 has had across different industries and geographies since March
2020, when the pandemic caused many business owners to temporarily shut
their doors. Accounting professionals will want to dig into the report results to
provide information to their clients and gauge how their own firms will grow.
SMALL BUSINESSES ARE RECOVERING
COVID-19 has had a significant impact on the financial health of American
small businesses. In fact, small businesses lost $4.6 billion in monthly revenue
in April 2020 alone, compared with their pre-COVID-19 revenue, according to
the report. However, many have proved to be resilient. As of March 31, 2021,
61% of industries saw annual revenue increase compared to before COVID-19.
The QuickBooks report examines small business financial health by leveraging
anonymized revenue data from between 800,000 to 1.1 million QuickBooks
Online customers. In collaboration with economist Susan Woodward, the report
uses net bank deposits, which show how much money is going into business
bank accounts, excluding government grants and loans, to provide the most
complete picture of small business revenues after the onset of COVID-19.
" Intuit QuickBooks data has provided extraordinary insights into the pandemic's
effect on small businesses, for worse, and for better, " said Woodward,
founder of Sand Hill Econometrics. " We can see where the recoveries are, and
where deterioration happened. Only QuickBooks can see genuine small company
revenues, monthly, by industry and location with such accuracy and timeliness. "
" My clients are currently split in two camps: the ones who have been waiting
for things to get back to normal and are hoping to serve their customers in the
same exact way it was pre-pandemic, and the ones who proactively adapted and
changed their business model, or even reactively forced to adapt to survive, "
said Hector Garcia, CPA, who has his own firm in South Florida. " For example,
one client who sold high-end specialty fresh mushrooms to restaurants, pivoted
and created an entire 'how to cook with mushrooms' video course series and
sold the cooking kits, including the mushrooms, straight to the customers. He
even developed a subscription program to have access to all the new plates
and courses every weekend, creating a new kind of customer and completely
pivoting their business model. "
REPORT HIGHLIGHTS
Throughout 2020, the financial health of U.S. small businesses rose and fell
in line with the pandemic, as states, counties, cities, and towns responded
with varying stringent or lenient COVID-19 operational guidelines. As stricter
regulations on how small businesses could operate were put in place, revenues
fell; as regulations were lifted, small businesses saw opportunities to rebound.
One year later, QuickBooks data reveals that even some of the hardest hit small
businesses are experiencing a recovery.
* In general, businesses in high-density urban areas - especially on the east and
west coasts - experienced a greater negative financial impact than those in rural
areas. Brooklyn, New York, and San Francisco were among the worst-hit cities.
* Some of the biggest losses were in the recreation industry. For example, bowling
alleys' annual revenues are down by 33% - a drop of more than $250,000 per
business - compared to before the pandemic.
* Home improvement and real estate businesses have been among the top performers
over the past 12 months. At the end of March 2021, mortgage bankers'
annual revenues were up by 30% compared to their pre-pandemic level - an
increase of $147,000 per business.
* In regards to accounting and tax services specifically, the report found that
accounting and bookkeeping firms experienced on average a 13% annual revenue
increase, which translates into more than $17,900 per business, by the end of
March 2021 in comparison to pre-pandemic levels; and tax return preparation
services saw an uptick of 12%, or an average of more than $18,000.
" During this last year, as the pandemic has brought unexpected changes,
small businesses have needed accountants more than ever, " said Ted Callahan,
accountant business leader at Intuit QuickBooks. " The accountant and
bookkeeper community has worked tirelessly to solve their clients' business
problems, build their confidence and equip them with the tools they need to
take action to protect, sustain, and grow their businesses. This commitment
truly inspires our team at QuickBooks to continue to deliver on our vision to
help accountants grow their practices and scale their impact. "
Access the full report and learn more about the sample, data, and
methodology. ■
The ProAdvisor Spotlight
is sponsored by
MAY 2021 ■ www.CPAPracticeAdvisor.com
13
http:// https://quickbooks.intuit.com/r/coronavirus/small-business-recovery/ http://www.CPAPracticeAdvisor.com
may2021

Table of Contents for the Digital Edition of may2021
