If you’ve ever questioned the value that an accountant or bookkeeper can bring to a small or medium-sized business, a new study provides proof: an annual revenue boost of 11.5% compared to SMEs that work alone.
The report from Intuit and Symmetry is the first to look in detail at the correlation between the use of accountancy services and revenue growth. Titled Accounting for the SMB Economy, it found that accountants ‘dramatically influence multiple facets of a business’, offering guidance on everything from business performance to long-term growth strategies.
The nation’s 5.49 million SMEs – referred to in the survey as SMBs, and defined as businesses with up to 250 employees – are the foundation of the UK economy, accounting for 99.9% of the business population and generating around £2.4 trillion in turnover every year.
At BKL we understand how challenging it can be to own and run an SME, especially at these times of economic uncertainty and regulatory complexity. We partner with growing businesses to reduce that stress: solving tough problems and managing risk to help them achieve their ambitions.
The revenue boost to SMEs
In the past, professional accounting services have been viewed as a pure expense. This research shows the financial benefits that firms like BKL can provide.
The report found that SMEs of all sizes that use professional accounting services see their revenue increase. Larger companies, which tend to use accountants more expansively, see the most benefits in terms of increased revenue.
Average increase in revenue per year for SMEs using professional accounting services:
| Sole traders | £6,175.60 | 8.9% |
| 1-9 employees | £31,740.15 | 7.9% |
| 10-49 employees | £180,156.95 | 10.1% |
| 50-99 employees | £392,995.91 | 12.8% |
| 100-250 employees | £553,009.06 | 13.7% |
The research found that the smallest companies are more likely to use accountants to ease the burden of standard compliance activities such as tax preparation & planning, bookkeeping and payroll services.
The largest companies (100+ employees) tend to turn to the advice of professional accountants in areas such as cashflow management, budgeting & forecasting and other financial consulting.
As a midsized firm, we’re able to give growing SMEs a full range of accounting & tax services in one place. We add value to businesses of all sizes, giving them the right support and tailoring that support as their challenges and goals change.
At the heart of that support is the pod structure within our Advance Business Services (ABS) team.
What is driving the revenue gains?
The report explains that the revenue increases are driven mainly by better financial management. This leads to substantial time savings (an average of nine hours a week) and enhanced decision-making capabilities. For example:
- 71% of SMEs surveyed said that professional accounting services improve cashflow management, which enables better decision-making
- 1% said that their financial reporting has strengthened, providing better opportunities for bank lending or government support
- 83% said they feel more confident about facing upcoming challenges, including Making Tax Digital, as a result of their accountants’ support
The impact of using professional accountancy services is clear across a wide range of factors, from better compliance to reduced stress.
SMEs reporting a ‘significant impact’ from using accountants:
| Profit margins | 31.8% |
| Cost management | 31.5% |
| Regulatory compliance | 42.0% |
| Business planning & strategy | 31.4% |
| Financial literacy | 40.2% |
| Stress reduction | 40.02% |
The significant impact on financial literacy is especially encouraging. We enjoy using our expert guidance to help owner-managers develop a deeper understanding of their business and how it derives value. Our client relationships are key to that.
A winning partnership
Given the results of the survey, it’s no surprise that over 92% of SMEs would recommend an accountant to another business that didn’t already have one. This reflects the way that accountancy services have shifted from bookkeeping and regulatory compliance towards true business partnerships.
To help clients build resilient, sustainable businesses, we combine broad advice with deeper knowledge. Alongside our strong compliance services, our growing range of advisory support includes sustainability, governance, IT and fractional CFO.
According to the study, over 21% of SMEs don’t currently use an accountant or bookkeeper. If you’re one of them, you don’t have to miss out. Get in touch today for a chat about how we can take your business forward.