US small businesses grapple with software fragmentation

Papertools has highlighted growing software fragmentation among US small businesses as more firms adopt multiple digital tools. Research the company cited shows 41% of US small businesses now use six or more technology platforms.

That figure was up from 14% in 2022, according to the US Chamber of Commerce's 2026 Empowering Small Business report.

The data points to a shift in the small-business software market from basic adoption to integration, as owners manage invoicing, payments, expenses and reconciliation across separate systems. Papertools, founded in Broome, Western Australia, by Adis Smajtic, argues that the burden falls on business owners when records do not stay connected across those workflows.

Separate research from Mastercard suggests the issue is widening. Its global study found that small and medium-sized businesses use an average of five digital business tools, while 89% want to adopt more and 78% view integrated tools as critical.

Those figures sit alongside evidence that technology use is still rising. US Chamber research found 84% of small businesses expect to increase their use of technology over the next two to three years, adding to pressure on finance teams and owner-operators to keep records aligned.

The handoff problem

Smajtic said the operational burden often comes not from any single software product, but from the gaps between them. Invoices may begin in one system, payments may arrive in another, and expenses may be stored elsewhere, leaving owners to connect records manually.

"Small-business tech isn't a software problem; it's a handoff problem," said Adis Smajtic, Founder, Papertools. "When an invoice originates in one tool, a payment arrives in another, an expense lives somewhere else, and the owner has to connect all the dots, the owner becomes the integration layer. That is precisely the work software should do."

Papertools positions its product around that problem by combining invoicing, payments, supplier bills, expenses, payroll, inventory, projects, contracts, bank reconciliation and financial reporting in one system. According to the company, those functions sit on the same double-entry accounting records rather than on separate datasets that must be matched later.

The approach targets a familiar issue in small-business finance operations: the same transaction often appears in different forms across multiple applications before it reaches the accounts. An invoice may be raised in one program, settled through a payment service, reflected in a bank feed, and then re-entered or reconciled in accounting software.

Product detail

One example is a feature called Quick Journal, which asks users to identify a business event and then generates the accounting entries behind it. In one use case, Papertools said recording a vehicle costing AUD $21,000 with an expected useful life of five years would produce monthly depreciation entries of AUD $350.

The same model applies across other workflows, the company said. An invoice remains linked to the payment that settles it, an expense can stay tied to a receipt and project, and bank statement lines can be matched against invoices, bills and expenses from the same records.

Papertools has also built artificial intelligence tools into the product. Its assistant can draft documents and answer questions about a business's books, while a reader tool can extract information from PDFs and images into bills or expenses for user review before records are saved.

For finance software providers, the challenge is not simply adding more functions but reducing the manual work created when businesses assemble software from multiple vendors. That is especially relevant for freelancers, sole traders and smaller companies that may not have dedicated finance staff.

"The essence of Papertools is that an invoice, payment, bill, receipt and bank transaction are all part of the same financial story," said Smajtic. "A small-business owner shouldn't need to be a software architect just to understand what happened in their business this month."

From documents to accounts

The current accounting platform grew out of earlier browser-based tools the company launched in 2025 to create invoices, estimates, and other business documents. Smajtic said feedback from early users showed demand for customer records, reusable data and visibility into what happened after an invoice was issued.

That led to the launch of Papertools.app in 2026 as an accounting and business management platform linking documents, payments and financial records. The company says its focus is on giving small businesses proper financial records without requiring them to train as bookkeepers or rely on a patchwork of applications.

"As small businesses keep adopting new tools, the evolution of business software will shift away from 'how many different apps can you use?' to 'how much manual work can those apps eliminate?'" said Smajtic. "Technology should simplify your business. If every new application just means another login, another record to reconcile and one more data stream to manage, you're not actually streamlining at all."