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Accountants Have The Biggest Positive Impact Of All Advisers on SME Revenues

Accountants Have The Biggest Positive Impact Of All Advisers on SME Revenues

There’s work to do for accountants if they are to become the go to trusted advisers to their clients – but according to the latest Scottish Pacific SME Growth Index those business owners who do rely on accountants reap the benefits.

Most accountants would hope and even expect to be seen as trusted advisers to their clients, yet our research found that the number of SME owners who name their accountant as most trusted adviser is four times less than those who say they have no trusted adviser.

Since 2014, Scottish Pacific has engaged specialist research firm East & Partners to conduct six monthly polls of more than 1200 small to medium enterprise leaders across all states and key industries, to test SME sentiment and concerns.

In the March 2017 round of the SME Growth Index, when asked to name their most trusted business adviser one in four SMEs say they depend on colleagues or trading partners. One in 10 consult friends, with only one in eleven consulting their accountant. Four out of 10 SME owners say they don’t really have a trusted business adviser. This might make for uncomfortable reading for the accounting sector, however it does highlight the size of the opportunity.

This is particularly so as those businesses who indicated that they rely on their accountant for advice are the ones seeing the most positive results.

SME owners and leaders clearly indicated that accountants (93 percent) had the most positive impact on their business, followed by family members (69 percent) then colleagues (59 percent). Almost one in ten SMEs who listed a friend or business colleague as their most trusted advisor indicated that they had a negative or very negative effect on the business. As the old saying goes, “If you think it’s expensive to hire a professional, try hiring an amateur”.

It is troubling that so many SMEs attempt to ‘go it alone’ despite the fact that outside advice might help them overcome their barriers to growth and other business issues.

Our SME Growth Index also found that, with more than 90 percent of SMEs concerned about their cashflow, working capital issues are costing the SME sector an estimated $222.5 billion in lost revenue each year.

When these findings are taken into account, the high percentage of lost revenue attributed to cash flow constraints, coupled with underwhelming investment in innovation, could perhaps be overcome if more SMEs sought quality business advice.

There is scope for accountants to have an even greater impact on the SME sector and that is in educating clients around the funding options available beyond traditional bank facilities to support SMEs. We are working with an increasing number of accountants who see debtor and trade finance options as attractive and viable funding options for their clients.

As well as addressing the obvious issue of easing cash flow pressures, debtor and trade finance can provide long term growth funding that increases in line with business revenues and free up assets outside the business, from being used as security for working capital.

Peter Langham is CEO of Scottish Pacific, an award-winning, ASX 300 debtor finance and trade finance business that supports the working capital requirements of Australian and New Zealand businesses.

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