How Accountants Can Help SMBs Grow in 2021 and Beyond

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We asked 3,000 small businesses what they need from their accountants

We asked thousands of small and medium businesses around the world about how their relationships with their accountants are evolving. Here’s what we learned about their challenges, and how accountants can help them grow.

What do SMBs need to grow? 

The global pandemic has changed how people are spending, resulting in a cash crunch that has gripped many SMBs. In some countries, state intervention has supported businesses in keeping employees on payroll and delaying rent and tax, but cash is a priority. SMB owners around the world said healthier cashflow was the number one factor for future growth, except in France – where better access to tax relief was the most popular.

Our research also shows that while 85% of SMB owners want to grow their business in the future, less than half are looking to grow within the next 12 months. Entrepreneurs under 34 years old are four times more likely to have struggled with their finances over the last 12 months, but they still want to grow. If you’re looking to take on more valuable clients, these are the ones who need extra support now.

How do SMBs see your role?

Accountants are seen as valuable for a range of services, but the data suggest that the majority still see you primarily as a source of value in traditional compliance areas, particularly tax.

Given the focus on cash, it’s understandable that businesses would be wary of taking on additional costs. The services they consider most valuable are also the ones they’re most willing to pay for, suggesting they’ll focus on covering essential compliance costs, and be wary of risking capital on growth-driving services.

53%  Of SMBs communicate with their accountant at least once a week.49% Of SMBs see their accountant as a business partner

Most businesses communicate with their advisors often, which is reflected in the way nearly half of SMB owners see their accountant as a partner in their business. However, the relationship seems to be changing:

  • Younger SMB owners (18-34) are generally in much more frequent contact, being 2 times more likely to be in touch with their accountant at least once a week than those over 45.
  • SMB owners between 18-34 were twice as likely to see their accountant as a business partner than those over 55.

This shows a clear desire among younger SMB owners for a closer relationship with their accountant, especially among the youngest entrepreneurs who were 5X more likely to be in daily contact with their accountant than those aged 55+.

This assistance does not only apply to accounting – they also show more interest in digital technology, financial support and regulatory education. To meet the needs of these businesses accountants will need to move beyond just sharing financial support and advice, to providing the means to utilise it.

Supporting younger businesses

Tax is consistently the most important service for all businesses, matched in willingness to pay, but it is notable how much this varies among age groups. 

Entrepreneurs aged 55+ have a strong willingness to pay for tax services audit and bookkeeping but very little appetite for newer value add services. Younger entrepreneurs (18-44) have a lower willingness to pay across all services (potentially reflecting smaller revenues and therefore less ability to afford these services) there are several value-add services where the youngest cohort shows the highest willingness to pay, including:

  • Virtual CFO services
  • Supply chain risk management
  • Identify business savings 
  • Cash flow management

For accountants looking to add higher value margin services, the newer generation of businesses are the best opportunity for growth and building value-focused relationships.

How can you grow your practice?

We asked SMBs who they would consult for support, like help with software that supports their business supply chain and reducing fraud in their finances.

Accountants were usually the top choice, among financial planners, bookkeepers, management consultants, family and friends, and business troubleshooters. Financial planners were slightly more popular, by a margin of 1% – but a significant number of respondents were not sure who to approach for advice.

Younger businesses are actively seeking out advisors that are able to offer these services, but owners over 45 also showed they didn’t know where to turn for these services. It also seems that older businesses owners’ accountants have stuck to a limited range of services – and for the majority of value-add services, SMB owners under 44 were nearly twice as likely to be willing to pay as those over 45.

The Next Generation Accountant

As the world returns to some version of normal, younger SMBs will be the driving force behind that growth. Not only do they have a stronger desire to grow their businesses in the short and long term, but they also have more appetite for expert advice.

You have the chance to play a key role in enabling their success, your approach will need to take into account both the needs of younger SMBs and the challenges and opportunities of the current commercial environment.

In order to remain relevant and valuable to SMBs, accountants must prioritize digital transformation and service delivery. There are two key reasons for this:

  1. Digital will be the new normal: Even before 2020 made in-person business more difficult, consumers and companies going digital. You’ll need to meet entrepreneurs on their level and adapt to the way they want to work.
     
  2. In-depth services require increased efficiency: As SMBs ask for more than compliance and traditional planning, you’ll need to refocus time and resources away from manual data collection, management and analysis. By automating these processes, you can prioritise value-adding services based on insights and customer interaction.