Making small business tax provisioning easier with fintech solutions

by | Oct 30, 2023

Running a small business is tough, and one of the hardest parts for any business owner is correctly dealing with tax provisioning. But here’s the good news: banks and fintech solutions can make it much simpler.

Discover how a forward-thinking bank can turn SMEs tax headache into a smoother experience, freeing them to focus on what truly matters: growing their business. 

Tax provisioning: business owners’ recurrent headache

For SMEs, correctly managing their tax obligations can be overwhelming. Two of the most significant challenges are the diverse tax obligations they must meet and the difficulties they find in collecting, keeping everything updated, and ensuring the accuracy of financial data for tax provisioning. 

The truth is that there are many transactions and different tax obligations to have in mind: income tax, sales tax, payroll tax, etc. And each one with its own set of rules and compliance.

The good news is that banks have a unique opportunity to address these challenges by offering comprehensive tax solutions to their SME customers. 

With the right solutions, small business owners can have everything they need to plan for taxes directly in their digital banking platform, becoming a trusted advisor and improving customer engagement rates.

How banks and fintech help with tax provisioning

Business tax provisioning can be confusing. Guessing how much money to save for taxes or not saving enough can lead to problems.

Building the right tools to address business concerns takes time and money, and so many banks need to catch up with this demand. However, the fintech industry has been working hard to create tools for banks that help small businesses in the latest years. 

With the help of technology, banks can put together all the money for their business customers’ income and expenses. This way, business customers get a clear picture of how much they need to set aside for taxes

Being a one-stop touchpoint for a business customer’s financial needs can mean a long and profitable relationship.

Small business owners need to understand their tax obligations at all times, and this information can be provided by banks and fintech solutions in real-time.

What can you do as a bank to help SMEs with tax provisioning?

There are many things you can do to help your business customers gain efficiency and succeed in their activities, but clearly one of the most appreciated is any help on tax provisioning.

You can start by offering them the possibility to oversee tax management over a selected period. This way, you’re helping your business customers to anticipate their tax obligations. Meaning that they can put the right amount of money aside to make a proper tax provisioning.

In addition, you can send personalized recommendations on tax adjustments at the right time, and become a trusted partner in his financial journey.

How can Strands solutions contribute to better business customer engagement?

The combination of a BFM tool with a powerful insights solution is key for banks to become more relevant. Thanks to the introduction of new data sources, and a good enrichment of these multiple data sources, you get a broader perspective of client activity and needs. 

The Strands tax provisioning feature empowers users to utilize surplus savings or a portion of their profits, effectively bolstering their provisioning. These funds can be allocated either automatically or at the user’s discretion, ensuring they meet their financial obligations promptly.     

Furthermore, users have the flexibility to establish new provisioning objectives beyond tax payments—such as allocating for corporate events or supply renewals—enabling them to achieve their goals with enhanced efficiency. This not only promotes customer retention but also cultivates better financial habits.

As a result, you are able to offer more on-target solutions, like sending proactive advice for them to feel more confident and with better control over their tax obligations, anticipating the correct amount of money at the right time, and promoting deposit growth.

If you’re interested in bringing peace of mind to your business clients regarding their taxes, don’t hesitate to contact one of our experts.

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