Research said more SMEs are now seeking business advice from their accountant and consider them as their most trusted adviser.
The proportion of small and medium enterprises (SMEs) that seek business advice from their accountant is rising, according to the latest SME Growth Index research by ScotPac.
Business owners are still most likely to turn to colleagues, suppliers or trading partners for advice, the research found. Obtaining advice from those unqualified, unfortunately tends to have inherent risk associated with it.
Despite the tendencies for small to medium businesses to seek advice from colleagues, suppliers or trading partners, the number of SMEs who consider their accountant as their most trusted adviser is on the rise. In fact, the demand for accountants has increased by 22% since 2015.
Upward trend ‘reassuring’
“A potential concern,” says the research report, “is that SMEs’ business strategy could be adversely affected by relying on [unqualified advisors].”
“So it’s reassuring that, while starting from a low base…accountants are trending upwards as most trusted advisor.”
In 2015 accountants were listed as key trusted advisor by 9% of SMEs, in 2017 by 9.3%, and in 2021 by 11.2%.
Influence of COVID-19 pandemic
More Australians relying to accountants to seek business advice is partly due to the extra reliance businesses have placed on their accountant during the COVID-19 pandemic, especially with regard to government grants and support.
In a separate question about how SMEs deal with cashflow issues, almost one in five SMEs (18.6%) chose to get on the front foot by applying pandemic recovery advice from their accountant.
“This external advice from accountants, bookkeepers, brokers and the like, has no doubt been crucial to the four out of 10 SMEs who say they have restructured in the past 12 months.
“It is also notable that the key pain points raised by SMEs in this round of research were new taxation imposts (43.7%) and supply chain disruptions (26.7%) — problems that mostly require external professional advice if they are to be successfully navigated.”
Growth vs non-growth businesses
Significantly, ScotPac’s research found growing businesses are almost twice as likely to have an accountant as their main trusted advisor compared to no-growth SMEs (14% versus 8.3%).
Similarly, no-growth SMEs were almost twice as likely to rely on a family member for advice compared to their growing counterparts (7.7% versus 4.3%).
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Debtor finance lender ScotPac’s SME Growth Index is Australia’s longest-running in-depth research on small business growth prospects. The September 2021 round surveyed the owners, CEOs or senior financial staff of 1255 SMEs (turnover of $1 million to $20 million) in a range of industries across Australia.
This article is published by R J Sanderson and Associates Pty Ltd ABN 71 060 299 783. This article contains general information only and is not intended to represent specific personal advice (Accounting, taxation, financial or credit). No individual personal circumstances have been taken into consideration for the preparation of this material. It is recommended that you obtain your own personal professional advice before making any financial or business decision.