The rise of subscription-based services
Throughout 2020, we have seen subscription services boom. It is predicted that the industry will be worth over $1 billion by 2022, growing by an estimated 77%. British consumers have shown a demand for these businesses. The biggest of these services is Amazon Prime, who have an impressive 61.4% of Brits subscribed to them.
Subscription businesses encourage brand loyalty and give business owners more control over their distribution channels. They mean lower start-up costs and easier control of promotions.
Why has it become popular during the COVID-19 pandemic?
As a result of nationwide lockdowns, we have seen the demand for all online delivery services, including subscriptions, increase dramatically. From make up to food, movies, plants, and pet supplies, practically any physical product which was once only available in store, can now be found as a subscription service.
Online subscription services have been succeeding too, with signups to Netflix increasing by 16 million during lockdown. Customers are now looking for ways to have the same experiences as before lockdown, brought directly into their homes.
What accounting support might you need as a subscription-based business?
Subscription businesses face similar challenges to any other business, as well as some which are unique. It is important that you have full visibility over and are able to track your business’ cash flow, as well as managing your obligations as a business owner regarding accounting, bookkeeping and returns.
Hiring a professional sole trader accountant will mean all of this is taken care of. If your subscriptions fall or increase, your accountant will be able to give you practical financial advice to ensure you are making the right decision for your business. They will also take away the administrative burden of running a subscription business, allowing you more time for connecting with customers and making important business decisions. Our business planning service will help you to plan for the changes in the climate following lockdown, and maintain your business’ momentum.
Find out more about our business planning services.
How can Xero benefit your subscription-based business?
Xero is an accounting software which is cloud-based, giving you real-time information from anywhere, including automatic chasing of invoices and purchase overviews, so you can track your spending with suppliers. You can collaborate with your tax advisor and staff, setting permissions to get the assistance you need, when you need it.
Xero is a secure platform to store your data on, with multiple layer security, including data encryption to an industry-standard and two-factor authentication.
Xero offers an app, which allows you to access your information from any location and log expenses on the move. The data is updated to the cloud, meaning you can be sure that anyone needing to access the data will have a live and up to date view of your accounts.
Click here to learn how Tim Taylor & Co. can support your business in partnership with Xero.