By Claire West
Trust in accountants has increased dramatically over the past two years, but just under 40% of small to medium sized businesses (SMBs) believe that they are not using them to full effect, according to the latest Pulse survey from business software and services provider Sage (UK) Limited.
The research of more than 500 business owners shows that although accountants have replaced banks (2%), the internet (20%) and family and friends (5%) as the UK’s most trusted small business advisors, many SMBs are missing out on the value and that the profession brings to decision making.
Accountants are now the first port of call for 52% of businesses, up from 49% in 2011. But with over three quarters (78%) of small business revealing that they have had to cut costs over the past 12 months to protect their business, there is a fantastic opportunity for accountants to help clients overcome the key challenges facing their firms today.
The Pulse survey revealed that that ensuring resilience (63%) and cash flow (57%) are the most pressing challenges facing clients in 2013, but overwhelmingly small businesses are turning to them for purely functional compliance tasks, such as managing and filing accounts (93%), and minimising tax liabilities (60%). Just one fifth of business owners (20%) use their accountant for advice and business planning, and for services such as HR advice the figure drops steeply to 5%.
“The UK accountancy profession is now ideally positioned to be an integral partner to UK small businesses, but it is surprising that so few are taking advantage of the full extent of services available beyond basic book keeping,” commented Paul Tooth, Managing Director, Sage Accountants Division. “There is no one better placed to provide advice and guidance on your business and with optimism returning to many parts of the economy it has never been more important to keep your accountant close.”
The research suggested that business owners who had a strong working relationship with their accountants were more optimistic about their prospects for growth in 2013. These business people viewed the relationship with their accountant as a partnership (35%) rather than a consultant/client (49%), or purely transactional relationship (16%).
Good accountants are worth their weight in gold, and can help small businesses effectively navigate a path to growth through a challenging economic environment. To help small business owners achieve a more valuable relationship with their accountant, Sage has developed five top tips to help foster a good partnership and allow business owners to get the best out of it.
Tap into your accountant’s networks
Your accountant will also be working for a host of other businesses that could be potential partners or prospects for your firm. Ask your accountant to initiate relationships with his or her other clients.
Pay for advice, not bookkeeping
Don’t spend a fortune on someone to organise your accounts, when you can use software to stay on top of the books. Accountants add real value to a business when they have the opportunity to consult and provide advice and guidance about realising your business’ potential and that is where approximately 40% of your fee should be sent.
Use them to get investment
When looking to secure an investment or a loan take your accountant along with you to back all of your points up with figures. Their presence can be the difference between a loan being approved or rejected.
Always be honest
Accountants need to know the facts about your business. Lying to them could lead to mistakes in your bookkeeping and could lead to major problems down the line.
Have regular catch ups
Arrange monthly face to face meetings or weekly phone calls with them so that they can spot opportunities to support growth or stop a problem before it gets too big.