What do SMEs really think about their accountants?

Accountants should be reassured that most SMEs view them as trustworthy. Yet, at the same time, they may wish to reconsider how they can better help their business clients. NAB’s inaugural Australian Accounting Industry Survey offers telling insights into what accountants are doing well – and where they could better respond to what their customers need and value.

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“Find an accountant who wants to design the future, not write up history,” responds one SME owner when questioned by NAB for its inaugural Australian Accounting Industry Survey.

It fits in with other findings from the survey – with the fact that one in five SMEs would like advice on financial future and growth opportunities on top of the services they already receive, and that a similar proportion would like to receive help with their business strategy. At least one in ten, meanwhile, would appreciate assistance with business planning (12 per cent), business analytics (17 per cent) or budgeting/forecasting (10 per cent).

More opportunities than initially meet the eye

These additional services could represent untapped opportunities for many accountants.  The fact that they are within their existing skill sets means they could easily be capitalised upon.

This is further supported by the finding that accountants play a key role in the business performance of SMEs and that, according to NAB’s survey, they are SMEs’ most trusted business adviser – most notably with regards to financial planning (47 per cent) and business planning (39 per cent).

What SMEs want and what accountants think they want

Accountants can’t be everything to everyone, however. Almost one in two SMEs (46 per cent) view technology/IT services as the fastest-growing services, while about one quarter (26 per cent) see legal services on the rise. Yet while a good portion of accountants view these as something of an opportunity for their profession, SMEs paint a rather different picture.

For instance, as many as 31 per cent of accountants believe their clients would most value receiving technology/IT services in addition to the services they already provide, yet only 13 per cent of SMEs are in fact keen to receive IT services from them. Meanwhile, just six per cent look to their accountant for legal services – a disconnect from the almost one in four accountants who believe SMEs would like them to provide this service outside of the services they already provide.

Nevertheless, accountants are well placed with their service offerings to meet most of the services that SMEs do turn to professional service firms for and while some core professional services used by SMEs aren’t traditionally the main focus of accounting firms, it’s clear from the survey that accountants could offer a broader range of services to capture a greater share of the professional services market.

Time-based billing has had its day

“Long-term relationships and trust can often be more important than price,” says another SME in response to NAB’s survey. This may be true but it’s clear that many SMEs aren’t particularly keen on the way accountants charge their fees.

In reality, the vast majority would be happy to see the end of time-based billing with just 16 per cent of SMEs preferring this traditional approach. Fixed fees are much more popular with more than one in two (52 per cent) businesses indicating their preference for these. Another one in five (19 per cent) reveal they would like a hybrid of time- and value-based billing.

This is in stark contrast to current practice, which sees about 52 per cent of all fees charged by accountants to their business clients being based on an hourly billing method.

A strong talking point

When it comes to communication, there may be room for change as well. Almost one in three SMEs communicate with accountants every couple of weeks, one in four once a month and around one in five every few days – and they think current communication frequency is about right.

Compare this to the fact that around one in three accountants only communicate with business clients once a quarter and one in four once a month. Only one in five communicate with them “every couple of weeks”.

To their credit, accountants admit they should have more frequent contact, which suggests they’re on the right track – they just need to be more proactive about it.

How did we do?

Perhaps more concerning is the finding that many accountants appear loath to seek critical feedback. Only one in five SMEs say their accounting firm frequently seeks feedback from them on the work they did, while half indicate they do so occasionally.

Of particular concern here is the fact that more than one in four businesses (28 per cent) say their accountants have never sought any feedback – with this figure jumping to 36 per cent for firms turning over $5 million to $10 million.

A win-win

Understanding clients’ needs and values is essential to helping them prosper. It is also important that accountants don’t stand still. According to NAB’s accounting survey, the overriding reason SMEs change their professional services firm is that their business needs have altered (about 31 per cent). This means accountants need to move with the times and modify their service offerings to their business clients as they grow and evolve. In that way, accountants can grow their businesses too.

To speak to a Professional Services specialist banker about the report, please click here.

For full analysis, download the report: