‘Bean counter’ view of accountants holding back entrepreneurs

THE OLD FASHIONED view of accountants as bean counters could be holding back entrepreneurs from sharing all their financial information with their accountants, according to research from Nottingham Business School.

The study, funded by CIMA, found that owner-managers risked poor cash-flow management and making decisions based in inadequate financial information because they did not want anyone else to know their business.

The report, Management Accounting Practices of UK SMEs, urges accountants to improve their image by refuting bean counter accusations and promoting themselves in business partnering roles.

One of the authors, professor Malcolm Prowle, claimed that accountants need to better educate entreprenuers.

“It is up to organisations like CIMA and accountants themselves to educate business people and promote their advisory and consultancy capabilities,” he said.

He added however, that many entrepreneurs wanted to keep a tight rein over the numbers.

“Some entrepreneurs, in particular, are reluctant to employ management accountants, expressing a desire to maintain control and have exclusive access to information they consider sensitive.

“They believe the process of crunching the numbers themselves gives them superior insights and greater control. This could effectively result in higher costs in terms of management time – time which might be better spent developing the business in other areas.

Professor Prowl is requesting that further research into the way SMEs reach critical decisions and into the psychological profile of executives particularly owner-managers be undertaken.