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How to become a trusted adviser to SMEs

Accountants are well placed to be so much more than filers of tax returns for their SME clients – so why did a recent survey show that fewer than 1 in 10 Australian SME owners would nominate their accountant as a trusted adviser?

Insights Greg Charlwood 30 September 2015
— 2 minute read

The March 2015 Scottish Pacific SME Growth Index sought the views of 1,200 entrepreneurs and senior managers of small businesses, and a whopping 39 percent of those polled admitted they did not have a trusted business adviser.


SME owners were just as likely to seek crucial business advice from friends (9.7 percent) as they were from their accountant (9.0 per cent).

In the current business landscape, where SMEs have so many business challenges – from ATO debt crackdowns to government red tape to access to credit – there is a great opportunity for accountants to really add value to Australia's crucial SME market.

Accountants who are part of an accounting body (such as the CPA or CA) are more likely to be seen as trusted advisers because of their knowledge, integrity and experience. There are other important actions accountants can take as part of the trusted adviser role.

5 ways to become a trusted adviser to small business

At FactorOne we work closely with referrers such as accountants and brokers, who bring their clients to us seeking factoring solutions to help their businesses grow, or to help them through tricky financial patches.

From what we've seen of our accountant referrers, here are the five key components they have demonstrated to become a trusted adviser to their clients:

1. Be part of the team

This involves asking the right questions, bringing opportunities to the table and highlighting risks the SME will face. It also means getting involved with business planning to ensure all areas are covered and pitfalls avoided.

It can mean being on top of different ways to fund a small business. We know of many accountants who have introduced the concept of debtor finance to clients tearing their hair out because they couldn't get bank funding or because they were nervous about putting their house on the line to fund the business.

2. Stay close in the early days

While many SME owners have years of experience, for some it's their first time out on their own. Statistics show that between 2010 and 2014, half of all new starts failed.

As the first few years is the riskiest time, this is when the accountant needs to be involved.

3. Help with break-even analysis

Many SMEs undertake such analysis but don’t have the expertise to cover all of the costs – it’s often a multitude of small holes that sinks the ship! Entrepreneurs can often have too rosy a view, so it is important to have a worst case scenario and plans should that scenario eventuate.

4. Be prepared to tweak

Have periodic meetings to review the budget and how it is actually tracking, and to consider tweaks necessary to keep on top of cash flow and profitability. Rarely do plans “go to plan” so it’s important that a trusted adviser implements periodic reviews of the success of business plans and forecasts. During these reviews it is essential that changes are made to strategy should it appear that goals aren’t going to be met.

5. Have the hard conversations

An entrepreneur can be very emotionally as well as financially invested in their business, and often won't see the writing on the wall.

A good accountant is perfectly placed to initiate the hard conversations around disposing of non-performing assets, laying off staff where necessary, or cutting back on expenses that are damaging working capital.

Having accountants fill the role of trusted adviser not only strengthens the entire SME business sector, it provides a range of new and deeper business opportunities for the accountant.

Their own practice will reap the benefits, from referrals from satisfied clients through to other business opportunities with that client (such as succession planning, mergers and acquisition deals and investments).


How to become a trusted adviser to SMEs
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Greg Charlwood

Greg Charlwood

Greg Charlwood is general manager of national cashflow solutions specialist FactorONE. A passionate supporter of SMEs, Greg has established and managed some of the major debtor finance businesses in Australia and twice chaired the industry body DIFA.