According to Colin Timmis, regional director for Europe, the Middle East, and Africa at Xero, the shift reflects a growing emphasis on making informed business decisions through a combination of digital tools and professional guidance.
Image: Supplied
South African small businesses are increasingly embracing digital technology and expert financial advice to strengthen resilience and improve decision-making as they navigate a challenging economic environment.
This is according to the 2026 Xero State of Small Business Report, which found that while most small and medium-sized enterprises (SMEs) are prioritising stability over rapid expansion, many continue to deliver strong financial performance.
The report showed that 80% of small businesses recorded revenue growth over the past year, while 75% reported increased profits. However, instead of pursuing aggressive growth strategies, 84% of businesses indicated they were focused on steady growth and operational stability.
According to Colin Timmis, regional director for Europe, the Middle East, and Africa at Xero, the shift reflects a growing emphasis on making informed business decisions through a combination of digital tools and professional guidance.
“What’s changed is not just the availability of technology, but how deliberately small businesses are using it,” said Timmis.
“There’s far less appetite for guesswork. Business owners want clarity on cash flow, margins and risk, and they’re increasingly turning to both digital tools and trusted advisors to guide decisions, not just record outcomes.”
The report highlights how digital adoption and artificial intelligence (AI) are becoming embedded in daily business operations. Around 85% of small businesses said they were prioritising digital adoption this year, with many using automation and AI to improve efficiency and gain better visibility into business performance.
More than half of respondents, about 52%, said they now use AI tools on a daily or weekly basis. Businesses are increasingly using the technology for tasks such as reporting, content creation and data analysis.
Despite rising adoption levels, the report found many business owners still lack confidence in understanding where AI can deliver the greatest practical value. Around 54% of respondents said they wanted more support in identifying how AI could improve day-to-day operations.
Timmis said this has created a growing role for accountants, bookkeepers and financial advisors in helping businesses translate digital insights into actionable strategies.
“While technology can help with more informed decision making, small businesses need help translating insights into action,” he said.
“Advisors are becoming critical interpreters, helping owners understand not just what the numbers say, but making suggestions for what they should do next.”
Economic uncertainty, higher input costs and ongoing pricing pressures continue to shape business planning across the SME sector. As a result, many businesses are focusing on strengthening financial discipline, managing cash flow carefully and avoiding unnecessary risks.
The report suggests that expert advice is no longer viewed as an occasional support function but is becoming central to strategic planning and operational decision-making.
“In times of uncertainty, accountants and bookkeepers remain the number one trusted expert,” said Timmis.
“The most successful small businesses are the ones combining smart technology with human experience to make faster, more confident decisions in uncertain conditions.”
Rather than using technology solely as a growth accelerator, many South African SMEs are adopting a more measured approach focused on improving resilience, visibility and long-term sustainability.
The findings point to a broader shift in mindset among small business owners, with technology increasingly seen as a tool for building stronger operational foundations rather than chasing rapid expansion at all costs.
BUSINESS REPORT