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Accountants need to change approach

CLEARLY, accountants have a key business development role with their small and medium business clients – but they need to increase their understanding of what makes entrepreneurs tick, and provide financial information in ways that helps businesses to improve performance and plan for the future.

Australia’s tax reform, the introduction of the GST and the requirement for new Business Activity Statements, all point to a much stronger reliance by businesses on their accountants, but they need to avoid the temptation to concentrate on audit and compliance work to the exclusion of business support and advice.

Research by the Foundation for Small and Medium Enterprise Development at the UK’s University of Durham, which I led, has uncovered many of the characteristics that make up small to medium enterprises, and drive and motivate the people who run them.

From an accountant’s point of view, the main challenges are understanding the smaller business, what their needs and requirements are, and how to package services that respond to these needs.

There are tremendous opportunities for accountants to play a more pivotal role in the growth of their clients’ businesses.

They have skills complementary to entrepreneurs but they need to invest more in developing the relationship.

That means spending more time with their clients to find out more about their needs, to establish an all-embracing relationship rather than simply that of client-supplier.

In packaging services to meet those needs, I foresee professionals becoming multi-functional – indeed, the lines between professional advisers are already beginning to blur.

Developing close relationships with small firm clients also makes considerable commercial sense for the accountant.

Fewer than 10 per cent of all small and medium sized enterprises are regarded as being at the “premium” end of the business spectrum – that is, they are dynamic, innovative and growing.

Many chartered accountants provide an excellent service to their clients and provide the necessary support to those seeking to grow.

However, too many others have been happy to soldier along, doing compliance and tax work for clients without really seeing the client’s bigger picture, or seeing their role as supporting the growth and development of the client’s business.

If chartered accountants are to survive and prosper then they should change their approach.

Experience elsewhere demonstrates that smaller firms are crying out for business development support from their accountants and, those professional practices that respond to this challenge, will reap the reward, both in terms of profit and satisfaction.

n Tim Atterton is the new executive director of the Small Business Unit at Curtin Business School. E-mail: AttertoT@cbs.curtin.edu.au

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