Business advice from accountants proves valuable yet most SMEs have a tax-only relationship
Small and medium business operators (SMEs) who use their accountant as a business advisor rather than only for compliance purposes have a greater likelihood of financial success. In fact, those whose accountant was an advisor were 31% more likely to see an earnings uplift in the past year.
The March 2013 MYOB Business Monitor found that SMEs who have an advisory or consultative relationship with their accountant were much more likely to see a revenue rise in the past year. They were also more optimistic about revenue expectations in the year ahead and had significantly more work in their pipeline for the next three months.
Despite survey results showing an advisory/consultative relationship is best for business, findings reveal the majority of SMEs have a tax-only relationship with their accountant. 57% defined their relationship as being for tax return completion or GST reporting only. 32% had an advisory/consultative relationship, meeting with them regularly throughout the year for strategic business advice. The remaining 11% did not have an accountant.
Over one in five (21%) of those with an advisory/consultative relationship experienced a rise in revenue over the past year. Only 17% of those with a tax relationship noticed a rise and 16% of those with no accountant. Interestingly, 8% of businesses without an accountant said they didn’t know if their revenue rose or fell in the past year.
MYOB General Manager, Accountants Division, Adam Ferguson, says there’s a strong opportunity for accountants to further promote their role as valuable business advisors to small and medium business operators.
“Many business operators only use their accountant for tax compliance, especially around end of the financial year. They could also gain valuable information and advice on many areas of their business. The costs of a working relationship with an accountant should be considered in relation to the value an accountant can bring to the business and not just the up-front payments.
“Our research identified that SMEs using an accountant for financial analysis, general business advice and/or consulting on profit strategies, strategic planning and the like are 21% more likely to enjoy increased revenue than their peers. That’s a strong case to dig a little deeper and explore the possibilities of the relationship.”
When looking to the year ahead, business operators who enjoyed an advisory/consultative relationship were the most likely to expect a revenue increase (33%). 27% of those with a tax relationship expected the same.
Accountant advice can create investment opportunities
When rating their likely investment areas for the coming year, SMEs who employ the services of their accountant in an advisory capacity were more likely to intend to increase their investment in business strategies overall.
Nearly half of those whose accountant was an advisor said they planned to increase their focus on customer acquisition strategies (47%), while 43% intended to increase investment in customer retention strategies this year. This was considerably higher when compared to those with a tax only relationship (30% and 36% respectively).
SMEs with an advisory relationship with their accountant were also more likely to increase their products or services (34%), online marketing and advertising spend (31%) and the amount paid to employees (30%).
“Interestingly, ‘attracting new customers’ is a pressure point for 62% of SMEs without an accountant, and yet SMEs whose accountant was an advisor were more likely to increase investment in customer acquisition/retention.
“Getting sound business advice from a trusted advisor can make it easier to address the areas within your business in need of attention. Working across an array of industries and clients, accountants are in a prime position to evaluate key areas that a business can build upon in order to succeed,” says Mr Ferguson.
| Top 5 investment areas for 2013 | Advisory relationship | Tax-only relationship | No accountant relationship |
| Focus on customer acquisition strategies | 47% | 30% | 26% |
| Focus on customer retention strategies | 43% | 36% | 28% |
| The number or variety of products or services offered by the business | 34% | 21% | 30% |
| The $ value of spending on marketing and advertising online | 31% | 16% | 17% |
| The amount paid to employees in the business | 30% | 17% | 16% |
Accountant advice on compliance most valuable
Nine out of 10 business operators who have an advisory/consultative relationship with their accountant find value in the service the accountant provides. 49% said the service provided was ‘valuable’, while 38% said the service provided was ‘very valuable’. Only 9% said it was neither valuable nor invaluable and 2% said it was ‘relatively invaluable’.
Three out of four business operators whose accountant was an advisor believed the most valuable service they receive was ‘keeping my business compliant with tax, payroll and other regulations’ (77%). This was followed by ‘advice on how best to manage the money that flows through my business’ (53%) and ‘advice on strategies that will help me grow my business’ (34%).
| Top 5 valuable services accountants provide | |
| Keeping my business compliant with tax, payroll and other regulations. | 77% |
| Advice on how best to manage the money that flows through my business. | 53% |
| Advice on strategies that will help me grow my business. | 34% |
| Providing me with the right advice and documentation for obtaining funds to grow the business. | 29% |
| Advice on what operational business moves to make e.g. setting pricing. | 18% |
Mr Ferguson adds, “As businesses realise the revenue and other growth potential to be gained from working with their accountant more regularly, they start to value that relationship a lot more. We hope more Australian business operators will begin to experience this value for themselves, and a reason why we have developed tools and resources such as MYOB CompanyDocs and the common ledger. ”
- What does 2021 have in store for ATO audit activity? - 26 November 2020
- Over 30,000 people have invested in crowd sourced funding equity raising - 13 August 2019
- The 7 things your SMSF clients are judging you on - 13 June 2019
