Many Australian SMEs fail to identify the point at which they need to transition from engaging with an accountant who can provide basic tax compliance advice to a business adviser who can help implement the right growth and profit strategies, according to RSM.
“Many smaller businesses only need basic accounting and tax services in the early days and can even get by with a bookkeeper rather than an actual accountant. However, as businesses grow their issues and needs naturally become more complex,” said Andy Graham, managing partner of RSM Australia Brisbane.
“At each stage of business growth, owners should assess the support and structures they have in place and consider if they are appropriate for where they want to take the business.”
According to Mr Graham, there are three stages most businesses go through when it comes to the accounting and advisory services they require.
In the first stage, businesses really only need an accountant or bookkeeper to document historical figures and performance of the business primarily for tax compliance purposes, Mr Graham said.
These businesses, which either have only just begun operating or have no growth aspirations, simply rely on an accountants to lodge tax returns and help ensure the business complies with all applicable tax regulations.
In the second stage, businesses allow their accountant to understand the business more intimately and provide some business insights through using big data dashboard reporting to identify the levers business owners can pull to achieve growth and profit, according to Mr Graham.
For many client accountant relationships, this is as deep as it gets because clients don’t realise they need an accountant who can do more than just shine a light on the levers to pull, Mr Graham said.
“Businesses usually get to where they have got because of the experience, expertise and skills of the owners and sometimes different experiences, expertise and skills are required to assist the business to go to the next level,” he said.
This is where the third stage should kick in, where accountants provide advisory solutions to support clients to implement the right growth and profit strategies, according to Mr Graham.
“While most business owners usually know what they want and where they want to take the business, sometimes they may struggle with how to go about this, often because they are time-poor and unsure how to maximise the value of their business,” he said.
“Couple that with potential issues like cash flow and pressure on profitability, and even internal conflict around prioritising the right issues to focus on given they all compete for time, energy and funding.”